The Patient-Centered Outcomes Research Institute (PCORI) fee, formerly the Comparative Effective Research Fee (CERF), began in October 2012 and applies to plans with plan years ending on or after October 1, 2012. This fee is a temporary fee and is scheduled to sunset as of September 30, 2019.
The fee will be used to fund clinical outcomes effectiveness research. Plans maintaining two or more group health plans that collectively provide major medical coverage for the same covered lives may be regarded as one group health plan.
Stop-loss policies, stand-alone dental and/or vision plans, integrated HRAs; HSAs; FSAs; Employee Assistance Plans, disease management and wellness programs, Medicare Part C and Part D products, employer-provided health coverage that pays secondary to Medicare, Expatriate plans and Medicaid plans.
Retiree only plans are not considered an excluded plan and must comply with the PCORI fee.
Amount of Fee per policy year
- For policy years ending between October 1, 2017 - September 30, 2018 the fee will be $2.39 per covered life.
- For policy years ending between October 1, 2016 - September 30, 2017 the fee will be $2.26 per covered life.
- For policy years ending between October 1, 2015 - September 30, 2016 the fee will be $2.17 per covered life.
- For policy years ending between October 1, 2014 – September 30, 2015 the fee will be $2.08 per covered life.
- For policy years that ended between October 1, 2013 – September 30, 2014 the fee is $2 per covered life.
- For policy years that ended between October 1, 2012 – September 30, 2013 the fee was $1 per covered life.
**For policy years ending on or after October 1, 2018, the fee will increase by the projected per capita of national health expenditures.
How to calculate enrollment
Enrollment can be calculated using either a daily, monthly or quarterly average for the plan year that just ended. The counting methods described to the right are permissible for purposes of calculating the fee:
- Actual Count Method. Total number of lives covered each day of the plan year divided by total number of days in the plan year.
- Snapshot Count Method. Calculate the total number of lives covered on a particular date in each quarter of the policy year (or within five days of the previous quarter date), add the total together and divide that total by the number of dates on which a count was made.
- Form 5500 Method (using the number of covered lives filed with the U.S. Department of Labor for the last applicable plan year). Add the total number of participants at the beginning of the policy year with the total number of participants at the end of the year and divide by 2.
When and Where to Send Payment
IRS Form 720 and any associated payments must be made to the IRS by July 31st of the calendar year following the end of the plan year.
Who is responsible for reporting and paying the PCORI 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. A TPA is not able to file the PCORI fee on behalf of their clients.
Assistance Meritain Can Offer
Meritain Health clients will produce the PCORI report using the snapshot count method, based on the dates entered by the report requestor. The report will include an instructional/explanatory page for the recipient, followed by the snapshot count report. The report will include the quarter, date of count, number of lives, average of the quarters, applicable fee for the period requested, and the total fee to be paid. If there is a period in which our system does not have the information to provide the number of lives count, the report will show a zero and the average will not be calculated.
The IRS may assess late penalties and excise taxes ranging from .5 to 25% of the fee to be determined by the IRS.
This content is being provided as an informational tool. It is believed to be accurate at the time of posting and is subject to change. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this information, Meritain Health is not exercising discretionary authority or assuming a plan fiduciary role, nor is Meritain Health providing legal advice.