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PCOR Fees

PCOR Fees
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by Christopher Macali on 08 June, 2015 with Add new comment

Once again it is time to start thinking about PCOR fees for your self-funded health plans. The Affordable Care Act created a nonprofit entity, the Patient-Centered Outcome Research Institute, to support research and grants for clinical effectiveness studies. The entity is funded by PCOR fees paid by insurers and employer sponsors of health plans. The fee applies to both fully insured health plans (paid by insurance carrier) and self-funded health plans (paid by employer), including major medical plans and HRAs. The fee does not apply to HIPAA excepted benefits or benefits that are otherwise exempt, including stand-alone dental and vision plans and most Health FSAs.

Employer sponsors of self-funded medical plans and HRAs need to be aware of the PCOR requirement and pay the applicable fee for those plans. Except stand-alone dental and vision plans, HRAs of all sizes and plan designs are subject to the PCOR fee, whether or not linked to a major medical plan. Employers with a fully insured medical plan and HRA must pay the fee for the HRA (the carrier is responsible for the medical plan). An employer sponsor of a self-funded medical plan and HRA will need to pay the fee for both plans, although employees covered by both plans only need to be counted once when determining the fee. Unlike major medical plans, which must pay the fee based on all covered members, including spouses and dependents, HRA plans may calculate the fee based on the number of employee participants only.

PCOR fees were first applicable to plans ending 10/1/12 and they will continue to apply to plans through September 2019. The fee amount for the upcoming 7/31/16 filing can be found below. Even though PCOR is an annual fee, the fee is paid as an excise tax and reported on the second quarter IRS Form 720, due by 7/31 of the year following the end of the plan year. A summary of deadlines is listed below based on specific plan years. The bolded rows are applicable to 2015 plan years due to the IRS by 7/31/16.

Summary of Deadlines & Fee Amounts:

Plan years ending prior to 10/1/12:  No fee
Plan years ending 10/1/12 – 12/31/12:  $1 fee per participant due by 7/31/13
Plan years ending 1/1/13 – 9/30/13:  $1 fee per participant due by 7/31/14
Plan years ending 10/1/13 – 12/31/13:  $2 fee per participant due by 7/31/14
Plan years ending 1/1/14 – 9/30/14:  $2 fee per participant due by 7/31/15
Plan years ending 10/1/14 – 12/31/14:  $2.08 fee per participant due by 7/31/15
Plan years ending 1/1/15 - 9/30/15:  $2.08 fee per participant due by 7/31/16
Plan years ending 10/1/15 - 12/31/15:  $2.17 fee per participant due by 7/31/16
Plan years ending 1/1/16 - 9/30/16:  $2.17 fee per participant due by 7/31/17
Plan years ending 10/1/16 - 12/31/16:  $2.26 fee per participant due by 7/31/17 
Plan years ending 1/1/17 - 9/30/19:  $2.26 fee (indexed) per participant due by 7/31 of following year

What ProBenefits Does To Help You Comply:

For HRA plans administered by ProBenefits, we contact the plan administrator 30-45 days prior to the annual filing deadline to confirm filing deadline and details. We provide a pre-populated IRS Form 720 (including the amount to be paid) and filing instructions. Once received, the plan administrator simply needs to review and submit the form and payment to the IRS. PCOR rules allow employers to use one of three methods to count participants in determining the annual fee for HRA plans. We utilize the “actual count” method, which consistently produces the lowest allowable fee. If you have any questions about this topic, you can contact benefits attorney, Chris Macali: This email address is being protected from spambots. You need JavaScript enabled to view it.

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Christopher Macali

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