What large group employers (51+) should know about the PCORI fee payment obligation.

There always tends to be some confusion when it comes to determining which plans are subject to the Patient Centered Outcome Research Institute (PCORI) fees that were created by the Affordable Care Act (ACA).  In some instances the insurance carrier pays the fees, and in other instances the employer is responsible for the fee. The information below is designed to help employers understand the PCORI fee payment obligation.

Due Date: PCORI fees must be paid by July 31, 2019.

Plans Subject to PCORI Fees: Group health plans with effective dates or renewal dates of January 2, 2017 through January 1, 2018. 

Fully-Insured Medical Plans: The insurance carrier will pay the fee.

Level-Funded Medical Plans: The employer is responsible for the fee. 

Self-Funded Medical Plans: The employer is responsible for the fee. 

Health Reimbursement Arrangements (HRAs): Special rules apply to HRAs, and if a fee is due it is the responsibility of the employer.  

  • HRAs Integrated with Self-Funded Medical Plans: The employer may treat the self-funded medical plan and HRA as a single plan assuming both plans have the same plan year. In other words, the PCORI fee won’t apply to the HRA. 
  • HRAs Integrated with Fully-Insured Medical Plans: The employer is responsible for the fee, but the employer may treat each HRA participant as a single covered life. In other words, the fee generally won’t apply to spouses and children. 
  • Retiree HRAs: The employer is responsible for the fee, but the employer may follow the rules above if the HRA is integrated with self-funded or fully-insured medical plan. 
  • Qualified Small Employer HRAs (QSEHRAs): The employer is responsible for the fee. 
  • Dental/Vision HRAs: These HRAs are exempt from the PCORI fees.

For additional details, please click here.

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