affordable care act (aca) reporting of fees

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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, Louis F. LiBrandi Principal llibrandi@odpk f.com 212.286.2600

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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 Firm

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Page 1: Affordable Care Act (ACA) Reporting of Fees

 

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  

Page 2: Affordable Care Act (ACA) Reporting of Fees

Contact:

New York, NY