affordable care act (aca) reporting of fees
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Learn about the PCORI (Patient-Centered Outcomes Research Institute) fee and reinsurance fee calculation for healthcare plan sponsors - O'Connor Davies - New York Accounting FirmTRANSCRIPT
Tax Notes Newsletter
Affordable Care Act (ACA) Reporting of PCORI and Reinsurance Fees
Louis F. LiBrandi, Principal
PCORI Fee
The Patient Protection and Affordable Care Act (“PPACA”) established the Patient-Centered Outcomes Research Institute (“PCORI”) to promote the use of evidence-based medicine by distributing comparative clinical effectiveness research findings.
To provide funds for the PCORI, plan sponsors of certain types of health coverage or arrangements will be required to file the Form 720 Quarterly Federal Excise Tax Return, (the “Form”) with an applicable fee. The Form is due to the Department of Treasury by July 31 of the calendar year immediately following the last day of the policy year or plan year to which the fee applies.
We previously issued a Newsletter on this new filing requirement which discussed who is responsible for paying and filing the Form, the alternative methods that can be used to determine the number of covered lives, and other general information.
The amount of the PCORI fee is equal to the number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year. For policy and plan years ending after September 30, 2013 and before October 1, 2014, the applicable dollar amount is $2.00.
The filing due in 2014 represents the second year the PCORI fee was required to be filed by plan sponsors. The PCORI fee will not be assessed for plan years ending after September 30, 2019.
Reinsurance Fee
Another temporary filing that is mandated by ACA is the reinsurance fee. The reinsurance fee is applicable for the 2014, 2015 and 2016 plan years. The first payment is due January 15, 2015 and it applies to both fully insured and self-funded plans. The reinsurance fee will be $5.25 per member per month ($63 annually) for 2014. The fees are collected by the U.S. Department of Health and Human Services (“HHS”).
The reinsurance fees are distributed to health insurance issuers in the non-grandfathered individual market that disproportionately attract individuals at risk for high medical costs. The intent is to spread the financial risk across all issuers to provide greater financial stability.
We anticipate issuing further information regarding the filing of this fee later in 2014.
Additional Information
Louis F. [email protected]
212.286.2600
Contact:
New York, NY
Contact:
New York, NY