June 2021 Benefits/HR Compliance Update

As a valued Ansay & Associates contact, we are pleased to provide you with several compliance updates and reminders for the upcoming year, with a focus on the following:

• REMINDER: Compliance Deadline of August 2, 2021 (since July 31, 2021, the normal due date, is a Saturday):
• PCORI Fees and Adjusted Amounts for 2021
• Updated Health Savings Account (HSA) / High Deductible Health Plan (HDHP) Limits for 2022
• REMINDER: Compliance Deadline of August 2, 2021 (for 2020 calendar year plans): 5500 filings

EEOC Issues New FAQs on COVID-19 Vaccine Programs & Incentives

REMINDER: Compliance Deadline of August 2, 2021: PCORI Fees

As you may know, the Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute (PCORI) to conduct research regarding healthcare issues (www.pcori.org). This fee was scheduled to end for plans or policies ending on or after Oct. 1, 2019, but was extended by Congress for an additional 10 years. In connection with PCORI, there is an upcoming filing and fee due on or before August 2, 2021.

In order to fund PCORI, the ACA imposed the PCORI fee, a tax assessed against major medical programs. For fully insured plans, the health insurance carrier pays the PCORI fee, but for self-funded plans, it is the obligation of the plan sponsor (the employer(s), employee organization, governmental entity, VEBA, or MEWA) to pay the PCORI fee.

To What Plans Does the PCORI fee apply?:

• Self-insured medical plan;
• Retiree-only self-insured medical plan;
• Self-insured drug plan – but if offered with self-insured medical plan with the same plan year, the plans can be treated as one self-insured medical plan with a single PCORI fee; and
• Health Reimbursement Arrangement (HRA) – fee due if it is integrated with a fully insured medical plan. If it is integrated with a self-insured medical plan with the same plan year, no separate PCORI fee required. Note: special counting rules apply to HRAs.

  Who Must Pay the PCORI fee:

  • For self-insured plans, plans sponsors are required to pay PCORI fees annually on IRS form 720.

    When the Fee Due and What is the Amount?

    • The PCORI fee originally applied to plans ending on or after Oct. 1, 2012 – Oct. 1, 2019, but was extended through a spending bill (signed into law on Dec. 20, 2019) for an additional 10 years through 2029.
    • For plans ending on or after Oct. 1, 2020 – Oct. 1, 2021, which includes calendar year plans, the fee is $2.66 per covered life.
    • For 2020 calendar year plans that ended on Dec. 31, 2020, the fee is due on or before August 2, 2021. The fee is deductible as a business expense.
    • For further questions on due dates, please refer to the IRS’s chart for the filing due date and applicable rate depending upon the month a fully insured policy or self-insured plan ends, although the chart has not been updated

      How is the Fee Calculated?:

      • The fee is calculated based on the average number of lives covered under the plan. This includes individuals enrolled via COBRA coverage. Self-insured medical plan sponsors can choose from the following methods to determine the number of covered lives: (1) actual count method; (2) snapshot method; or (3) Form 5500 method. These methods are detailed by the IRS here. Many TPAs will also provide a count of covered lives under one of these methods. For HRAs (and some FSAs), the plan sponsor can assume one covered life for each employee.