To answer this question, we need to know the types of plans that need to pay PCORI fees. In general, the PCORI fees are assessed, collected and enforced like taxes. The PCORI fee is imposed on an insurer of a specified health insurance policy, and a plan sponsor of an applicable self-insured health plan. This fee is filed by July 31st every year using the Form 720.
To assess their obligations, employers should:
Determine which plans are subject to the PCORI fees
Assess the plan funding status to determine whether the issue or the employer is responsible for the fees
For self-insured plans, select an approach for calculating average covered lives
Yes, fully insured plans pay the PCORI fees. Fully insured plans include medical coverage plans, COBRA coverage, and Health Reimbursement Arrangement (HRA) plans. The PCORI fee applies to fully funded plans provided by health insurers and self-funded insurance plans provided by employers. Fully insured plans include -
Major medical coverage plans - These are health insurance plans that cover a wide range of medical expenses, including maternity health insurance, critical illness insurance, health maintenance organization plans, preferred provider organization plans, etc.
COBRA coverage - This refers to health insurance continuation coverage provided under the Consolidated Omnibus Budget Reconciliation Act (COBRA). This federal law allows individuals who lose their job or undergo a qualifying life event to temporarily continue their employer sponsored health insurance plan.
Health Reimbursement Arrangement plans - This is a type of employer-funded benefit plan that reimburses employees for qualified medical expenses.
Major medical coverage for retirees - Medical coverage for retirees includes Medicare, Medicaid, and COBRA. Medicare is a federally-funded health insurance program for people 65 years and older. Medicaid provides health coverage to low-income seniors and people with disabilities.
In a nutshell
The answer to the question “do fully insured plans pay PCORI fees” has been provided in this blog. Additionally, details on the types of fully-insured plans that need to pay PCORI fees have also been provided.