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Northwest OH Legal Blog

Tuesday, November 10, 2015

The IRS and HHS Have Released New Information on Affordable Care Act’s PCORI fees and Reinsurance Contributions

PCORI Fees.

The IRS in Notice 2015-60 announced that the adjusted applicable dollar amount for Patient Centered Outcomes Research Institute (PCORI fees for plan and policy years ending on or after October 1, 2015 and before October 1, 2016 is $2.17.

This is a $.09 increase from the amount in effect for plan and policy years ending on or after October 1, 2014 and before October 1, 2015. PCORI fees are payable by insurers and sponsors of self-insured plans. The fees are calculated by multiplying the applicable dollar amount for the year by the average number of covered lives.

Reinsurance Contributions.

HHS has announced that the form for submitting the 2015 annual enrollment count and remitting the contribution amount owed for the transitional reinsurance program is now available. According to the announcement, contributing entities (generally, health insurers and self-insured group health plans providing major medical coverage) must submit the 2015 form and schedule their reinsurance contribution payments no later than November 16, 2015.

The contribution amount is $44 per covered life. The payment can be paid in a single payment or in two parts.  If the contribution is made in a single payment, the payment is due no later than January 15, 2016. If the contribution is paid in two parts, the first payment ($33 per covered life) is due no later than January 15, 2016 and the second payment ($11 per covered life) is due no later than November 15, 2016.

As was the case with the 2014 benefit year, all submissions must be made online through the government portal: pay.gov. A Transitional Reinsurance Contributions webpage (registration required) provides additional information and resources.

PCORI fees are used to fund research on patient-centered outcomes and apply to plan and policy years ending after October 1, 2012 and before October 1, 2019.

Reinsurance contributions are used to fund a temporary reinsurance program (in operation from 2014 through 2016) intended to stabilize premiums in the individual insurance market.

Who Pays the Fee.

Issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans are responsible for reporting and paying the PCORI fee.

For insured plans, the insurer is responsible for paying PCORI fees and reinsurance contributions.  For self-insured plans, PCORI fees are imposed on the plan sponsor and generally cannot be paid from ERISA plan assets. However, the DOL has indicated the board of trustees of a multiemployer plan (which has no other source of funding), as well as a voluntary employees’ beneficiary association (VEBA) providing retiree-only coverage, may use plan assets to pay the fee.

By contrast, Reinsurance contributions are imposed on the plan itself and may be paid from ERISA plan assets. 


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