New IRS Reporting Requirement as Part of the Affordable Care Act

The Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute (PCORI) Fee. The PCORI fee applies to policies or plan years ending on or after October 1, 2012.  The fee is calculated based on the average number of lives covered by the plan multiplied by $1.  July 31, 2013 marks the first due date of the reporting and payment of the PCORI fee for plan years ending December 31, 2012.  The fee is reported in Part II of IRS Form 720 – Quarterly Federal Excise Tax Return.  Deposits of the annual PCORI fee must be made via the Electronic Federal Tax Payment System (EFTPS).

The PCORI fee is imposed on both fully insured and self-funded plan sponsors.  The fee will most likely be paid by the insurance carrier under a fully insured scenario, and passed on to the employer as a premium increase.  However, in a self-funded plan scenario, the plan sponsor is required to pay the PCORI fee.  The plan sponsor would also be required to file IRS Form 720 by July 31, 2013.

Contact us should you have any questions on this new PCORI fee or related reporting requirements.

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