What is PCORI?
PCORI is a fee formulated by the Affordable Care Act (ACA) also known as Obamacare. The purpose of this fee is to fund the Patient-Centered Outcomes Research Institute which evaluates the risks and benefits of various medical treatments and health outcomes. The goal of this research is to assist the general public to make more knowledgeable health decisions.
Who is Responsible for Paying the PCORI Fee?
The PCORI fee is temporary and based on covered lives. The covered lives include employees and their covered dependent spouses and children who are covered by a health insurance plan. For fully insured plans, the insurance carrier is responsible for paying the fees. For companies that provide self-insured health plans, the employer or plan sponsor is the one responsible for paying the payments on behalf of their employees.
A self-insured health plan is any plan that provides health coverage other than through insurance. As an employer, you are responsible for maintaining these plans on behalf of your employees.
How Much Is the PCORI Fee and How is it Calculated?
For you to determine how much PCORI fee your employer should pay, the average of the number of lives covered under their health plan is calculated. These people include the employees' spouse and their dependents.
Before Oct 2013 the PCORI fee was calculated by multiplying $1 by the average number of lives covered under the plan per year. The following year this amount was increased to $2. Since 2014 the Fee has been growing based on the increase of the projected per capita amount of national health expenditures.
If you are an employer, who has sponsored your employees' self-funded medical plans ending sometime during 2017 you must report and pay the ACA Patient-Centered Outcomes Research Institute (PCORI) fees by July 31, 2018.
Is PCORI Important to me as an Employer?
The PCORI fee is based on the number of your employees and their dependents. It is your duty as an employer to analyze the most cost-effective way your employees can pay their PCORI plan according to their membership plan.
You should also note that:
If your employees have fully-insured plans, you are not required to pay anything.
For self-funded insurance plans, the fees are filed and paid directly by you the employer.
Health Reimbursement Accounts (HRA) integrated with a self-funded major medical plan are not subject to the PCORI fee.
The above information should guide you in determining whether or not you should be paying the PCORI fee for a particular plan.