Staying compliant can be challenging, not to mention a detriment to your bottom line if certain deadlines or criteria are not met. If your organization is self-funded, read the below information from our VP of Compliance on PCOR Fees and their remittance deadline of July 31st, 2016. You will find all you need to know, along with some helpful links from the IRS. If you find yourself wanting to pull your hair out, we are here to help make the journey of compliance a little less complicated one. Just give us a call or shoot us an email today.
Under the ACA, all medical plans are responsible for paying the Patient-Centered Outcomes Research (PCOR) fee to the IRS, based on the average number of lives covered under the plan. If the plan is insured, the insurance carrier pays the fee on behalf of the policyholder. If the plan is self-insured, the employer/plan sponsor must file the Form 720 (Quarterly Federal Excise Tax Return) and pay the fee to the IRS directly. Insurance carriers or plan sponsors that file Form 720 only to report the PCOR fee will not need to file Form 720 for the first, third or fourth quarter of the year. Insurance carriers or plan sponsors that file Form 720 to report quarterly excise tax liability for the first, third or fourth quarter of the year (for example, to report the foreign insurance tax) should not make an entry on the line for the PCOR tax on those filings.
PCOR fees are due each year by July 31 of the year following the last day of the plan year. However, because July 31, 2016, is a Sunday, the PCOR fees are due by Aug. 1, 2016, for plan years ending in 2015. The fees are slightly different depending on when the plan year ends. Specifically, for plan years ending on or after October 1, 2014 and before October 1, 2015 the fee is $2.08 per covered life. For plan years ending on or after October 1, 2015 and before October 1, 2016 the fee is $2.17 per covered life. There are several methods (Actual Count, Snapshot and Form 5500) which can be utilized to determine the average number of lives covered under the plan.
Helpful IRS Links:
PCORI Fee: Questions and Answers
PCORI Fee Due Dates and Applicable Rates
The materials and information contained in this email represent the opinions of Alltrust Insurance, Inc. and are for informational purposes only, not for the purpose of providing legal advice. The opinions expressed in this communication are made based on currently available information and are subject to change at any time. For advice about a specific legal question or situation in your organization, Alltrust Insurance, Inc. recommends you contact legal counsel of your choice.