The IRS has published an updated overview of the Patient Centered Outcomes Research (PCOR) fee that spells out which plans are subject to the fee, who pays the fee, when the fee is due, how to calculate the total fee for the plan and its payment.
The PCOR fee is payable for all group health plans, whether insured or self-insured, including health reimbursement arrangements (HRAs) and non-excepted health flexible spending arrangements (FSAs). The insurer of an insured health plan pays the fee for that plan. The employer-sponsor of a self-insured health plan (e.g., HRA) pays the fee for the self-insured health plan.
All plans, regardless of plan year, pay the PCOR fee by the July 31st of the next calendar year immediately following the end of the plan’s year. For example, a plan year that ended December 31, 2013 pays the PCOR fee by July 31, 2014. Likewise, a plan year that ended August 31, 2013, also pays the PCOR fee by July 31, 2014.
The PCOR fee total amount due is a function of the number of covered lives under the plan (e.g., employees, spouses and dependents). However, under guidance issued in late-2012, HRAs and affected health FSAs are allowed to count only the covered employees as the covered lives.
The PCOR fee is reported using IRS Form 720 and payment is made using the second quarter Form 720, even by employers that normally would not file a Form 720.