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IRS Increases PCOR Fees; HHS Issues 2015 Reinsurance Contributions Form and Announces Payment Due Dates

IRS Notice 2015-60 (Oct. 9, 2015); HHS Announcement: 2015 ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form (Oct. 1, 2015)

IRS Notice 2015-60

HHS Announcement

Visit the Health Care Reform Community on Checkpoint to join the discussion on this development (for Checkpoint subscribers to EBIA’s Health Care Reform manual).

The IRS and HHS have released new information on health care reform’s PCOR fees and reinsurance contributions, as follows:

  • PCOR Fees. IRS Notice 2015-60 announces that the adjusted applicable dollar amount for PCOR fees for plan and policy years ending on or after October 1, 2015 and before October 1, 2016 is $2.17. This is a $.09 increase from the amount in effect for plan and policy years ending on or after October 1, 2014 and before October 1, 2015 (see our article). PCOR fees are payable by insurers and sponsors of self-insured plans, and are calculated by multiplying the applicable dollar amount for the year by the average number of covered lives.
  • Reinsurance Contributions. HHS has announced that the form for submitting the 2015 annual enrollment count and remitting the contribution amount owed for the transitional reinsurance program is now available. According to the announcement, contributing entities (generally, health insurers and self-insured group health plans providing major medical coverage) must submit the 2015 form and schedule their reinsurance contribution payments no later than November 16, 2015. The contribution amount is $44 per covered life. If the contribution is made in a single payment, the payment is due no later than January 15, 2016. If the contribution is paid in two parts, the first payment ($33 per covered life) is due no later than January 15, 2016 and the second payment ($11 per covered life) is due no later than November 15, 2016. As with the 2014 benefit year, all submissions must be made online through the government portal, (see our article). A Transitional Reinsurance Contributions webpage (registration required) provides additional information and resources.

EBIA Comment: PCOR fees are used to fund research on patient-centered outcomes and apply to plan and policy years ending after October 1, 2012 and before October 1, 2019. Reinsurance contributions are used to fund a temporary reinsurance program (in operation from 2014 through 2016) intended to stabilize premiums in the individual insurance market. For insured plans, the insurer is responsible for paying PCOR fees and reinsurance contributions. For self-insured plans, PCOR fees are imposed on the plan sponsor and generally cannot be paid from ERISA plan assets, while reinsurance contributions are imposed on the plan itself and may be paid from plan assets (if otherwise permitted). For more information, see EBIA’s Health Care Reform manual at Sections XXXVI.H (“Patient-Centered Outcomes Research (PCOR) Fees”) and XXXVI.I (“Required Contributions Toward Reinsurance Payments”). See also EBIA’s Consumer-Driven Health Care manual at Sections XXV.G.5.c (“HRAs and Health Care Reform: Fees to Fund Research on Patient-Centered Outcomes”) and XXV.G.5.d (“HRAs and Health Care Reform: Reinsurance Program Contribution Requirement”), and EBIA’s Self-Insured Health Plans manual at Sections VI.H.3 (“Fees to Fund Research on Patient-Centered Outcomes”) and VI.H.4 (“Required Contributions Toward Reinsurance Payments”).

Contributing Editors: EBIA Staff.

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