PCORI Fee Due for Co-op-sponsored HRA and Certain 125 Plans by July 31

IRS resources and NRECA’s ACA FAQs can help you understand the fee.

The fee to fund comparative effectiveness research for the Patient-Centered Outcomes Research Institute (PCORI), known as the PCORI fee, is due by July 31, 2014 for the 2013 plan year. Plan sponsors, including those that sponsor health reimbursement arrangement (HRA) plans and 125 plans with non-HIPAA-excepted 125 Plan health flexible spending account (health FSA) plans, are required to pay this fee. A non-HIPAA-excepted health FSA has an employer contribution of more than $500, and employer and employee contributions that don’t match.

Since the NRECA Medical Plan and co-op-sponsored HRA and 125 plans are separate plans, a PCORI fee is due for each of these types of plans. As the plan sponsor for the NRECA Medical Plan, NRECA will pay the fee for the medical plan. As plan sponsors for HRA and health FSA plans, co-ops with HRA plans or 125 plans with non-HIPAA-excepted health FSAs, regardless of who administers them, are responsible for paying the applicable fee.

Paying and reporting the fee
The PCORI fee is equal to the average number of covered lives (including dependents) for the plan year times the applicable dollar amount. For the 2013 plan year, the dollar amount is $2 per covered life. After 2013, it will be the prior year’s dollar amount plus an adjustment for medical inflation. The fee will continue through 2018, when it will be phased out.

The PCORI fee is reported and paid annually using IRS Form 720 Quarterly Federal Excise Tax Return.

For more information
For more information on the PCORI fee, such as calculating it, see the Q&A document and its summary chart from the IRS. You also can view the PCORI fee final rules and regulations.

You also can check out the PCORI fee section of our Affordable Care Act Frequently Asked Questions on the Employee Benefits website.

This information is our interpretation of the PCORI fee rules and regulations, and isn’t intended to constitute legal advice. We encourage you to talk with your co-op’s legal counsel about your responsibilities regarding the PCORI fee.