Reminder: Employers with Self-Insured Plans Must Pay PCOR Fees by July 31st.

Starting in July 2013, the Affordable Care Act (ACA) required employers with self-insured plans to pay an annual PCOR fee.  As we approach the one-year anniversary of the initial deadline for paying the PCOR fees, here is a brief update on what is required for employers subject to the fee.  The fee supports a federal Patient-Centered Outcomes Research Institute, to research and provide guidance regarding comparative clinical effectiveness of various medical treatments.

How much is the PCOR fee?

The PCOR fee is equal to the average number of lives covered during the policy or plan year multiplied by the applicable dollar amount for the year.  The applicable dollar amount for policy years ending on or after October 1, 2013, and before October 1, 2014 is $2. (This is an increase from $1 for plan years ending before October 1, 2013.)  For future policy years, until September 30, 2019, the applicable dollar amount will be calculated by adding an adjustment based on the per capita increase of National Health Expenditures. The fee sunsets for policy and plan years beginning after October 1, 2019, and employers will no longer be required to pay it after July 31, 2020.

How does a self-insured employer pay the PCOR Fee?

A self-insured employer must submit IRS Form 720 "Quarterly Federal Excise Tax Return" and pay the annual fee by July 31 of each year following the last day of the plan year to which the fee applies, even though it is reported on a quarterly form.