Great Lakes Wire

The deadline for submitting Patient-Centered Outcomes Research Institute (PCORI) fees is approaching, with a due date set for July 31. Employers sponsoring self-insured group health plans are required to report and pay these fees using the latest IRS Form 720, known as the Quarterly Federal Excise Tax Return.

While insurance carriers handle the PCORI fee payment for fully insured plans, employers must cover the fee for self-insured medical benefits. This includes general-purpose health flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs). In cases where plans offer both fully-insured and self-insured benefits, both insurers and employers have fee obligations.

The applicable fee is determined by the end date of the most recent plan year. For plan years ending between January 1, 2024, and September 30, 2024, the fee stands at $3.00 per covered life. For those ending between October 1, 2024, and December 31, 2024, it rises to $3.47 per covered life.

Plan sponsors have three methods available to determine the average number of covered lives:

- The actual count method involves calculating the total number of lives covered each day of the plan year divided by total days in that year.

- The snapshot method averages lives covered on selected dates each quarter.

- The Form 5500 method uses participant numbers reported on Form 5500.

When counting covered lives under self-insured programs, former employees and dependents under COBRA or other post-employment coverage should be included. Self-insured benefits can be treated as a single plan while treating health FSAs and HRAs as providing self-only coverage.

This article is provided courtesy of Warner Norcross+Judd.

For further information or resources related to this topic, please refer to additional news sources.