The Internal Revenue Service (IRS) has issued a final rule (pdf) addressing the fees imposed by the Affordable Care Act on issuers of certain health insurance policies and plan sponsors of certain self-insured health plans to help finance the Patient-Centered Outcomes Research Institute (PCORI), a private, nonprofit corporation whose purpose is to "assist, through research, patients, clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence-based medicine through the synthesis and dissemination of comparative clinical effectiveness research findings." The fees described in the final rule apply to policy and plan years ending on or after October 1, 2012, and before October 1, 2019.

Specifically, the fees imposed on an issuer of a specified health insurance policy and those imposed on a plan sponsor of an applicable self-insured health plan is two dollars (one dollar in the case of policy years ending before October 1, 2013) multiplied by the average number of lives covered under the policy or plan. For policy or plan years ending on or after October 1, 2014, the fee is increased based on increases in the projected per capita amount of National Health Expenditures. The fee is to be reported and paid by the issuer of the policy or plan sponsor for a policy or plan year no later than July 31 of the year following the last day of the policy or plan year.

The regulations define a " specified health insurance policy" as any accident or health insurance policy (including a policy under a group health plan) issued to individuals residing in the United States. The rule does make certain exceptions. For example, the rule provides that a specified health insurance policy does not include any insurance policy to the extent it provides for an employee assistance program (EAP), disease management program, or wellness program, if the program does not provide significant benefits in the nature of medical care or treatment. Nor does the term include HIPAA "excepted benefits"

A "plan sponsor" is defined as the employer in the case of a plan established or maintained by a single employer, or the employee organization in the case of a plan established or maintained by an employee organization. The rule elaborates that in the case of: (1) a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, (2) a multiple employer welfare arrangement, or (3) a voluntary employees' beneficiary association, the plan sponsor is the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.

In response to comments on the proposed rule issued last April, the final regulations "apply the PCORI fee to specified health insurance policies or applicable self-insured health plans that provide accident and health coverage to retirees, including retiree-only policies and plans." In addition, the final regulations state explicitly that COBRA continuation coverage must be taken into account in determining the PCORI fee, unless the arrangement is otherwise excluded.

The final rule does not, however, adopt a commenter's request that the fee apply only once with respect to each covered life because doing so "would be contrary to the explicit statutory language applying the fee to each specified health insurance policy or applicable self-insured health plan." The rule does allow an applicable self-insured health plan that provides accident and health coverage through fully-insured options and self-insured options to disregard lives that are covered solely under the fully-insured options when calculating the PCORI fee.

The regulations include a number of examples to provide issuers and plan sponsors with guidance on how the PCORI fee will be calculated and applied, including those clarifying the application of the fee to an HRA.

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