
IRS Issues New Form 720 for Reporting ACA Research Fee
June 10, 2013
The IRS has issued a revised Form 720 and corresponding instructions to allow for the reporting and payment of the fee for the Patient-Centered Outcomes Research Institute (PCORI) formed as part of the Affordable Care Act (ACA).
Background
The ACA imposes fees on certain health insurers and self-insured health plan sponsors for policy or plan years ending on or after October 1, 2012. The fee contributes to an effort to help fund clinical effectiveness research. The annual fee deadline is July 31st of the calendar year following the end of the employer’s plan year. The first deadline is July 31, 2013, for the reporting and payment of fees for policy and plan years ending between October 1 and December 31, 2012.
The insurance carrier will file fees for all fully-insured plans, but employer/plan sponsors must file and pay the fee for self-funded health plans, including Health Reimbursement Arrangements (HRAs).
New Form 720
The new Form 720 and instructions can be found at www.irs.gov/form720. The instructions briefly explain the alternative methods for calculating the average number of covered lives, which include special transition rules for first-year reporting. Final regulations regarding payment of the fee can also be found at http://www.irs.gov/irb/2012-52_IRB/ar11.html.
For more detailed information on the health plan fees to fund research on patient-centered outcomes, view Parker, Smith & Feek benefit alert. for February
As always, if you have any questions about this subject, please contact your Parker, Smith & Feek Benefits Team.
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.
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