Form 720 Preparation
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Form 720 Preparation CBIZ MHM Do you have a self-funded health plan? If so, you may be required to film Form 720 by July 31, 2015, and pay a fee of $2 or $2.08 (depending on your plan year) per covered life. Professional guidance is advised, as there are several methods for calculating this fee. Virtually all self-funded health plans are subject to the fee, even most health reimbursement arrangements (HRAs) and some flexible spending arrangements (FSAs). Application of the fee Your self-funded plan may be subject to this fee even if you are not required to file a Form 5500 for that plan (e.x., plans with less than 100 participants, government plans, etc.) PLAN YEAR ENDS BETWEEN: APPLICABLE DOLLAR AMOUNT Sept. 30, 2013 - Oct. 1, 2014 Sept. 30, 2014 - Oct. 1, 2015 Oct. 1, 2015 - Oct. 1, 2019 $2 $2.08 Dollar amount is adjusted to reflect inflation in National Health Expenditures, as determined by the Secretary of Health and Human Services Why the Fee is Being Levied The purpose of the Patient-Centered Outcomes Research Institute (PCORI) fee is to fund a Patient-Centered Outcomes Research Trust Fund. This trust fund supports the PCORI, which assists patients, clinicians, purchasers and policymakers in making information health decisions by advancing comparative clinical effectiveness research. The Affordable Care Act imposes fees on issuers of specified health insurance policies (defined under section 4375) and plan sponsors of applicable self-insured health plans (defined under section 4376). You calculate the PCORI fee based on the average number of covered lives under the plan. HRAs and FSAs are permitted to use special counting rules; plan sponsors can assume on covered life for each employee with an HSA or a FSA. The PCORI fee is remitted on Form 720, Quarterly Excise Tax Return. Calculation of the Fee The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount of the year. Although the calculation of the fee may seem straightforward, there are several nuances to deriving the proper fee owed. For assistance in determining whether your plan is subject to the PCORI fee or how to calculate and remit the fee, please contact your local CBIZ MHM tax specialist. Phyllis Hoff is a Managing Director in our Benefits Compliance group. She specializes in employee benefits and ERISA reporting and disclosure requirements. Phyllis works with clients on auditing health care claim payments, eligibility audits, preparing Form 5500s and non-discrimination testing. She also serves a liaison between clients and insurance carriers. 314.692.5887 * phoff@cbiz.com You may also benefit from the myriad of tax and consulting services provided by CBIZ. For more information about our service offerings or to locate your local CBIZ office, visit us online at www.cbiz.com. © Copyright 2015. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved.
Transcript of Form 720 Preparation
Form 720 PreparationCBIZ MHM
Do you have a self-funded health plan? If so, you may be required to film Form 720 by July 31, 2015, and pay a fee of $2 or $2.08 (depending on your plan year) per covered life. Professional guidance is advised, as there are several methods for calculating this fee. Virtually all self-funded health plans are subject to the fee, even most health reimbursement arrangements (HRAs) and some flexible spending arrangements (FSAs).
Application of the feeYour self-funded plan may be subject to this fee even if you are not required to file a Form 5500 for that plan (e.x., plans with less than 100 participants, government plans, etc.)
PLAN YEAR ENDS BETWEEN: APPLICABLE DOLLAR AMOUNT
Sept. 30, 2013 - Oct. 1, 2014
Sept. 30, 2014 - Oct. 1, 2015Oct. 1, 2015 - Oct. 1, 2019
$2
$2.08Dollar amount is adjusted to reflect inflation in National Health Expenditures, as determined by the Secretary of Health and Human Services
Why the Fee is Being LeviedThe purpose of the Patient-Centered Outcomes Research Institute (PCORI) fee is to fund a Patient-Centered Outcomes Research Trust Fund. This trust fund supports the PCORI, which assists patients, clinicians, purchasers and policymakers in making information health decisions by advancing comparative clinical effectiveness research.The Affordable Care Act imposes fees on issuers of specified health insurance policies (defined under section 4375) and plan sponsors of applicable self-insured health plans (defined under section 4376). You calculate the PCORI fee based on the average number of covered lives under the plan. HRAs and FSAs are permitted to use special counting rules; plan sponsors can assume on covered life for each employee with an HSA or a FSA. The PCORI fee is remitted on Form 720, Quarterly Excise Tax Return.
Calculation of the FeeThe amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount of the year.
Although the calculation of the fee may seem straightforward, there are several nuances to deriving the proper fee owed. For assistance in determining whether your plan is subject to the PCORI fee or how to calculate and remit the fee, please contact your local CBIZ MHM tax specialist.
Phyllis Hoff is a Managing Director in our Benefits Compliance group. She specializes in employee benefits and ERISA reporting and disclosure requirements. Phyllis works with clients on auditing health care claim payments, eligibility audits, preparing Form 5500s and non-discrimination testing. She also serves a liaison between clients and insurance carriers.
314.692.5887 * [email protected]
You may also benefit from the myriad of tax and consulting services provided by CBIZ. For more information about our service offerings or to locate your local CBIZ office, visit us online at www.cbiz.com.
© Copyright 2015. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved.
