Employers that sponsor certain self-insured health plans are responsible for fees under ACA to fund the Patient-Centered Outcomes Research Institute (PCORI). The definition of self-insured generally includes a health reimbursement arrangement (HRA). With the help of your HRA vendor, you have been paying and reporting this fee each year with IRS Form 720.
Recently the IRS has begun to audit the PCORI fees. If chosen for an audit, employer plans are asked to:
Identify all of its covered group health plans,
- Identify any plans that were determined to be exempt from the PCORI Fee and provide the applicable legal authority for that conclusion,
- Specify the method for counting the average number of lives, and
- Provide all associated work papers. In addition, for insured plans, these audits request Forms 1094-B and 1095-C be available during the examination.
Employer plans selected for an audit will have 20 days from the date of IRS notice to provide requested information. Therefore, employers may wish to perform an internal review to ensure filings are correct and up-to-date.