Information Regarding the CERF/PCORI Fee for 2015: Who Pays, How Much and When

Information Regarding the CERF/PCORI Fee for 2015: Who Pays, How Much and When

CignaInformation provided by our partner Cigna

CERF Overview

The Comparative Effectiveness Research Fee (CERF), also known as the Patient-Centered Outcomes Research Institute (PCORI) Fee, was introduced as a fee to help fund the ACA. Monies collected from this fee will be used to conduct research that determines the effectiveness of various forms of medical services that treat, manage, diagnose or prevent illness or injury (alternative patient treatments). With that said, it is important to understand how this nominal fee will affect you and your employees.

The 2015 CERF payments are due on 7/31/15.

This date corresponds with the 2nd quarter filing dates per the IRS instructions.

The fee applies to both insured and self-funded medical plans. It is based on average covered individuals (employees + dependents). 

  • What is CERF/PCORI?
    • CERF is an annual fee on insured and self-funded health plans
  • Who pays the CERF Fee (Insured Plan vs. Self-Funded Plan)?
    • Insurers pay for insured plans as the fee is built into the rates
    • Employers pay for self-funded/self-insured plans as insurers are not allowed to pay or calculate the fee
  • When is the CERF Fee due?
    • Applies to plan years beginning on or after 10/2/11
    • First payments were due 7/31/13
    • Fee continues through 9/30/19 with the last payment due 7/31/20
  • Which IRS form is needed?
    • Fee is self reported on IRS Form 720 (see below for link to form and instructions)
  • How much is the CERF Fee?
    • Initial annual fee began as $1 per participant, including dependents
    • Increases to $2 for plan years beginning on or after 10/2/12
    • Increases to $2.08 for plan years ending on or after 10/1/14 and before 10/1/15
    • Amount for future years in indexed to national health expenditures
  • How often is the CERF Fee due?
    • The CERF Fee is due annually and is based on your ERISA plan year.
  • What is the importance of the ERISA plan year?
    • ERISA plan year is the key. If your ERISA plan year and renewal date are different, use the ERISA plan year to calculate your fee per covered life and payment due date. If you are unsure, please contact a FosterThomas Employee Benefits Specialist for assistance.
  • Who has to pay the CERF Fee?
    • Fully insured medical plans, including minimum premium plans
    • Self-insured group medical plans
    • Individual/family plans
    • Stand-alone behavioral health plans
    • Limited medical plans (also known as Voluntary plans)
    • Individuals on a temporary U.S. Visa who live in the U.S. (Government/Federal Contractors, see GovConHR)
    • Medicare Surround and Medicare Expand policies
    • Retiree-only plans
    • Health Reimbursement Accounts (HRAs)
    • Flexible Spending Accounts (FSAs) if the employer contribution is > $500 and it is more than the employee contribution
  • Who is exempt from the CERF Fee?
    • U.S.-issued expatriate plans
    • Exempt FSA plans
    • Medicare Parts A-D coverage
    • Medicaid coverage
    • Health Savings Accounts (HSAs)
    • Stand-alone dental plans
    • Stand-alone vision plans
    • Employee Assistance Plans (EAPs)

Full Insured Plan Fast Facts

  • The fee is built into premiums and is paid by the insurer as part of the rates
  • Clients are typically responsible for paying the fee for their respective HRA and FSA funds. Check with your plan administrator for further details.

Self-Insured/Self-Funded Employer Fast Facts

  • The employer is responsible for paying the fee
  • We can assist you with determining average covered employees
  • If the medical plan and the HRA or FSA have the same plan year, the employer pays one fee
  • If the HRA or FSA have different plan years, an annual fee is due on each

SELF-FUNDING INFORMATION

Helpful Forms and Downloads for CERF

CERF FACT SHEET FROM CIGNA

IRS FORM 720

INSTRUCTIONS FOR FORM 720

702 E-FILE PROVIDERS

CERF PAYMENT/DUE DATE GRID FROM CIGNA

2015 CERF Payment Details

ERISA Plan Year Start Date                                                             Fee Due on 7/31/15

2/1/13                                                                                                         $2/per average covered life

3/1/13

4/1/13

5/1/13

6/1/13

7/1/13

8/1/13

9/1/13

10/1/13

11/1/13                                                                                                         $2.08/per average covered life

12/1/13

1/1/14

 

Questions/Concerns Regarding your Health Care Coverage and CERF?

Health Care Reform, HR Compliance, and Employee Benefits Consulting

Since 1993, FosterThomas has delivered cost-effective, proactive, custom employee benefits solutions. We address them through the design and delivery of the perfectly loaded benefits package that will help you attract and retain employees, while implementing alternative wellness & risk management ideas to contain health care costs. Let’s talk.

EMPLOYEE BENEFITS HELP

HEALTH CARE REFORM INFORMATION

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FosterThomas is a leading professional services company that provides solutions in the areas of Human Resources Consulting and Outsourcing, HR Staffing, Outsourced Recruiting, Employee Benefits Brokerage, Payroll Implementation and Services, HR for Government Contractors, Business Insurance, HR Compliance and Risk Management. We help organizations by providing solutions designed with a focus on cost containment strategies and increasing HR efficiency. FosterThomas HR Consulting was established in 1993 with offices in Annapolis, Maryland (Corporate), McLean, Virginia and Raleigh, North Carolina. Today, FosterThomas occupies a unique position as a full service provider of HR services.

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