Proposed Patient-Centered Outcomes Research Institute Fees
The IRS has proposed that the issuers of fully insured and self-insured health plans be responsible for paying fees to fund the Patient-Centered Outcomes Research Institute.
Background information about PCOR
The Patient-Centered Outcomes Research Institute (PCOR) was established as a provision of the Affordable Care Act. “The purpose of the Institute is to assist through research, patients, clinicians, purchasers, and policymakers in making informed health decisions. This will be done by advancing the quality of clinical effectiveness through research.”
How this Affects Plan Sponsors
This directly affects clients with Health Reimbursement Account (HRA) plans. Sponsors of HRA plans will be expected to pay the fees if their plan year ends on or after October 1, 2012 and before October 19, 2019. “The fee is $1.00 multiplied by the average number of covered lives.” The fee then increases to $2.00 for plan years ending on or after October 1, 2013. For subsequent plan years the fees will increase based on health care inflation.
The fees are calculated by using three methods.
- Actual Count Method – “this takes into account the lives covered on each day during the plan year.”
- Snapshot Method – “this is based on the number of lives covered on one day of the plan year.”
- Form 5500 Method – “this is based on the number of participants as of the beginning and end of the plan year based on the Form 5500.”
Plan sponsors who have two or more self-insured plans with the same plan year, will be treated as a single plan leaving only one fee to be paid instead of two. Examples of this would be an HRA and a self-insured medical plan or an HRA and a self-insured prescription drug plan.
There is still time to turn in written or electronic comments about the fees by July 16, 2012. Requests to speak at the public hearing and outlines of topics must be turned in by July 30, 2012. A hearing is scheduled for August 8, 2012.
What do we know about PCOR?
- Plan Sponsors with HRA plans are effected
- The fee is $1.00 for first year, $2.00 for second year and will be subject to adjustment based on changes in the per capita National Health Expenditures as reported by the Treasury
- Plan Sponsors only have to pay one fee if they have two or more self-insured plans with the same plan year
- This proposal is still in progress as of 5/11/2012 – changes will be coming
- Public hearing on 8/8/2012
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