Ellin & Tucker Offices
E&T Logo - Full Color Reverse

Don’t Forget: Quarterly Federal Excise Tax is Due July 31st

Posted Under:

The Patient Protection and Affordable Care Act (PPACA) created a special excise tax due each year on July 31st called the Patient-Centered Outcomes Research Institute (PCORI) fee. This fee is used to fund a research institute to study and provide advice on various health care issues. The PCORI fee is generally paid by your organization’s health insurance company; however, if your organization has a self-insured health plan, your organization is responsible for paying the PCORI fee. Also, if your organization has a health reimbursement arrangement (HRA), it will be subject to the PCORI fee, as well as your health insurance provider. If your organization offers a flex spending account (FSA), it may also be subject to the fee.

According to the IRS website, here are some updates:

Policy Fee

The fee for policy and plan years ending on or after October 1, 2015, but before October 1, 2016, is the applicable rate of $2.17, multiplied by the average number of lives covered under the policy or plan. The applicable rate for policy and plan years ending on or after October 1, 2016, will be included in future revisions. For updated information, see Future Developments above. The fee for policy and plan years ending on or after October 1, 2014, but before October 1, 2015, remains at the applicable rate of $2.08, multiplied by the average number of lives covered under the policy or plan. See Patient-centered outcomes research fee (IRS No. 133), later, and Notice 2015-60.

Form expansion

Form 720 is expanded to 8 pages to accommodate future changes more easily. For example, Part III and the signature area now stand alone on page 3; IRS No. 133 is expanded so the fee calculation can be done entirely on the form; the Form 720-V, Payment Voucher, is on the 8th (last) page.Here’s what’s new for 2016:

If your organization offers health insurance, we suggest you contact your health insurance agent, health insurance provider, or third party administrator to determine if it is subject to this fee. If your organization has an HRA, your provider will probably provide the number of employee-covered lives, but your organization must file Form 720.

Please feel free to call if you would like more details concerning the PCORI fee or need any help completing Form 720 for your organization’s HRA.

You may download a copy of the F720 FORM and I720 instructions here.

Contact Us

Required Fields *

First Name *

Last Name *

Email Address *

Phone

Mailing Address

Services of Interest
 Accounting Services Audit Services Business Valuation Consulting Project Corporate Tax Family Wealth Practice Forensic Accounting Litigation Support Individual Tax

Other (Please Specify):

 I'd like to receive news and updates from Ellin & Tucker

Comments *

Join Our Mailing List

Industry
Entity