Certain Plan Designs Will Cost More Under the Patient-Centered Outcomes Research Institute Fees
The Affordable Care Act establishes a Patient-Centered Outcomes Research Institute as a private nonprofit corporation to assist patients, clinicians, purchasers and policy makers in making informed health decisions using evidence based medicine. The Institute is to be funded through a trust fund called the Patient-Centered Outcomes Research Trust Fund. Under the Affordable Care Act, both health insurance issuers and sponsors of self-funded health plans are required to contribute to the trust fund. The IRS recently finalized regulations on those contributions or fees.
Generally speaking, the trust fund fee is $1.00 per covered life for a specified health insurance policy or self-funded medical plan for policy years ending on or after October 1, 2012 and $2.00 in the case of policy or plan years ending before October 1, 2013. Thereafter, the fee is increased based on increases in the projected per capita amount of national health expenditures. The fee expires after 2019. The fee is imposed per covered life so the fee will be paid with respect to each covered family member if a plan covers both the employee and dependents. Get paid to all these payments on our website online-casino österreich.
The fee is not owed with respect to certain plans, including plans that cover only prescription drugs, dental, or vision benefits. In addition, health savings accounts (HSAs) and most flexible spending account (FSA) plans will be exempt from the fee. Employers who sponsor multiple self-funded plans with the same plan year ends can aggregate those plans and pay the fee once on overlapping lives. Note, however, that because the fee is imposed on the plan sponsor and not on the plan itself, the employer must pay the fee outside the plan. According to the Department of Labor, plan assets cannot be used to pay the fee.
Health reimbursement arrangements (HRAs) are considered medical plans on which the fee is imposed. Employers with self-funded high deductible health plans that are paired with self-funded HRAs can aggregate those plans and pay the fee once with respect to an individual covered by both the high deductible health plan and the HRA. In contrast, an employer that sponsors a fully insured high deductible health plan paired with a self-funded HRA will essentially be required to pay the fee twice on the same lives. The IRS concluded that because separate statutes impose the fee on plan sponsors of self-funded plans and insurance companies issuing fully insured policies, the IRS is unable to permit employers with both types of plans to combine them for purposes of determining the number of covered lives that they have.
Employers who sponsor self-funded HRAs with fully insured medical plans may wish to consider other plan designs to avoid this fee, such as self-funding the high deductible health plan or moving to a plan design that uses HSAs instead of HRAs. Alternatively, if there are relatively few people covered under the HRA and if the HRA has been an effective plan design, employers may simply decide to continue offering the plan and pay the additional fee.
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