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In the case of fully insured plans, the plan issuer or insurer (not the plan sponsor) is subject to the fee; however, we encourage employers to review this information and pay special attention to the:
“Plans Subject to the Fee” section to ensure they do not have to submit a fee for their HRA plans, FSA plans, or other self-insured coverage. The insurer is responsible for paying the PCORI fee for fully insured plans.
Fully insured and self-insured plans providing accident or health insurance for individuals living in the U.S., and plans established and maintained by an employer or employee organization to provide accident and health coverage are subject to the fee. This includes retiree-only plans, but does allow certain exemptions, such as excepted benefits.
In the case of fully insured plans, the plan issuer or insurer (not the plan sponsor) is subject to the fee.
The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year.
HRAs and Health FSAs that are not excepted benefits have special counting rules based on other plans provided (or not provided) by the employer.
Stand-Alone: If the HRA/Health FSA is not integrated with another self-funded plan, count one covered life for each employee with an HRA/Health FSA. Note that this differs from the counting method used for health plans, which must count each covered life (employees and dependents).
Integrated With Fully Insured Coverage: The employer must pay the PCORI fee for the self-insured HRA/Health FSA, calculated by counting one covered life for each employee with an HRA/Health FSA.
Integrated With Self-Insured Coverage: Count each individual covered by both plans only once. Add to this any individuals covered by only one plan using the counting method used for other individuals in that plan.
The fees must be reported once a year on IRS Form 720 (Rev. April 2018) (Instructions). This form must be filed and fees paid on July 31 of the calendar year immediately following the last day of the plan year. The entity responsible for fee payment is subject to an excise tax ranging from 5% of the fee up to 25% of the fee, in addition to the fee itself.
Material contained in ComplianceDashboard is a compilation of generally published information by the Department of Labor and other public agencies regulating employee benefit plans and employee benefit issues. It is not legal advice, and should not be construed as legal advice. If legal advice or other professional assistance is or may be required with regard to any issues referenced in this website, the services of a competent legal or tax professional should be immediately sought. The inclusion of links within the ComplianceDashboard website is for informational purposes only. ComplianceDashboard does not warrant the accuracy of information outside this website that is found as a result of following links contained herein, nor does the inclusion of those links herein constitute endorsement of the content of any other website. If you have questions regarding this disclaimer, please contact us at 877-328-7880.