Some PCORI Fees Due This Wednesday – Do You Owe?

Joe Popp | July 29th, 2013

And so it continues… the next deadline in a long list of fee deadlines for the Affordable Healthcare Act is fast approaching. If you are a business that is self-insured for health care (this includes Health Reimbursement Arrangements/Accounts), and if you had a plan year end on or between Oct. 1, 2012 and Dec. 31, 2012, then you have a new fee to pay by this Wednesday, July 31, 2013. Calendar year plans are included in this because their end date would have been Dec. 31, 2012.

This new fee, the Patient-Centered Outcomes Research Institute (PCORI) fee, is based on the number of lives covered by your plan. There are a couple ways to calculate the number of lives covered, including an actual count and a couple of sample selection options.  The fee is $1 per life and is reported/paid on Form 720, which is due this Wednesday. The IRS guidance below provides you with a nice summary of the ways you can do that and further explains what the fee is for and who exactly has to pay. The general idea is that companies that provide insurance pay the fee. It is possible to have multiple fees paid by different entities on the same lives (the IRS has tried to limit this through the rules below).

Never filed a 720 before?  Not to worry, it’s pretty easy. You might think of it as a “hodgepodge” of different tax types that are too specific or rare to end up reported elsewhere.  For example, the tax on fishing pole producers and arrow makers are also reported on this form. You’ll only need to fill out a line or two and your identifying information. It actually might be the easiest IRS form you ever file!

For additional details, here are some links you may find valuable:

 – Final Regulations for Fees on Health Insurance Policies and Self-Insured Plans for the Patient-Centered Outcomes Research Trust Fund (all of the fine print!)

Health Care Reform Help

If you need help making sense of this new fee or have questions about filing, contact Rea & Associates. Our Ohio tax professionals can help you figure out what you need to pay related to the PCORI fees.

 

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