Reminder: PCORI Fee Extended and Due July 31

As announced previously in the March 2020 Benefits Bulletin, the Patient-Centered Outcomes Research Institute (PCORI) fee, which funds the institute, was reinstated by the SECURE Act for 10 more years and will be assessed for certain self-insured health plans annually through the 2028 plan year. The fee of $2.54 per covered life for the 2019 plan year is due by July 31, 2020.

Health reimbursement arrangement (HRA) and non-HIPAA-excepted 125 Plan health flexible spending account (health FSA) plans are subject to the PCORI fee. (A non-HIPAA-excepted health FSA is a plan that has an employer contribution of more than $500, and employer and employee contributions that don’t match.) Plan sponsors of these plans—in this case, cooperatives—are responsible for paying the PCORI fee regardless of who administers the plan.

Report and pay the fee using IRS Form 720 Quarterly Federal Excise Tax Return.

Because plan sponsors may not have anticipated calculating covered lives for the 2019 plan year, the IRS has said any reasonable means of calculating the average number of covered lives, including the actual count, snapshot and Form 5500 methods, may be used.

If your co-op participates in the NRECA Medical Plan and sponsors no other medical plan, count all employees who participate in your HRA or health FSA plan for the PCORI fee. Don’t include spouses and dependents—NRECA will cover their fee in the medical plan payment.

If your co-op doesn’t participate in the NRECA Medical Plan, you can treat your medical plans and HRA or health FSA (assuming they have the same plan year) as a single plan to calculate the fee. In this case, count all covered spouses and dependents. The co-op is responsible for the PCORI fee for its non-NRECA medical plans and HRA or health FSA plans.

If you have questions, contact the Member Contact Center at 866.673.2299 or at contactcenter@nreca.coop.