The Affordable Care Act (ACA) developed the Patient Centered Outcomes Research (PCOR) Institute to improve the quality of information available to help patients, clinicians, caregivers, employers, insurers, and policy makers make informed health decisions. In order to fund the institute, the ACA imposes a fee to be paid once a year to the Internal Revenue Service (IRS). This year the due date is Aug. 1, 2016.
If your plan is fully insured, then your health insurer is responsible for paying the fee. For
self-insured plans, the employer plan sponsor is responsible for paying the PCOR fee. The PCOR fee is filed using IRS Form 720. For self-insured health plans, the fee is calculated using the average number of total lives covered by the plan (both employees and dependents).
The requirement for the calculation of the total fee is to use one of the following three calculation methods:
• Actual count method
• Snapshot method
• Form 5500 method
Plan sponsors should review all three methods to determine the lowest amount to be paid. Plan sponsors are required to use a single method per plan year, but can change the method of calculation from plan year to plan year.
If you have any questions about ACA compliance issues or any other employee benefits matter, please do not hesitate to contact Dannae Delano.