The PCORI fee deadline is on July 31, 2016 and relates to Health Reimbursement Arrangements (HRAs), per the Affordable Care Act. If you or your clients have been utilizing an HRA, be aware of the impending deadline.
The fee is required to be reported annually on Form 720, Quarterly Federal Excise Tax Return, for the second quarter of the calendar year. The fee for a plan year ending on or after October 1, 2015, but before October 1, 2016, is $2.17 multiplied by the number of employees covered under the plan for that plan year. However, plan years ending before October 1, 2015 should figure the fee by multiplying the number of employees covered under the plan for that plan year by $2.08.
This fee has been in effect since 2012 and will continue to be adjusted annually based on inflation, as determined by the Secretary of Health and Human Services. Currently, the PCORI fee will no longer apply to policy or plan years ending after September 30, 2019. Employers should review Summary Plan Descriptions to make certain the correct dollar amount is being used on the form for 2016.
Not all HRA plan sponsors are required to pay the fee per IRS and Department of Labor guidance issued.
• Section 105 HRA (with only 1 employee)
Business owners with one employee that have an HRA in place do not have to pay this fee.
• Integrated HRA (with 2 or more employees)
Business owners with two or more employees that have an HRA in place are required to pay the fee by July 31, 2016.
• Excepted Benefits HRA
Business owners with an Excepted Benefits HRA in place are not subject to the fee since it provides only excepted benefits.
For complete instructions on paying and submitting the PCORI fee, please visit http://www.irs.gov/pub/irs-pdf/i720.pdf. If you have any questions regarding this information or tax advantaged plans call BASE® at 1-888-386-9680. Learn more about how you and your clients can save money with tax saving benefits by visiting www.BASEonline.com or contacting a BASE® representative.