Monday, January 14, 2013

BCBSNC: Affordable Care Act Update

In July, BCBSNC released an update to the new Patient-Centered Outcomes Research Trust Fund Fee, previously known as the Comparative Effective Research Fee, imposed under the Affordable Care Act (ACA). The Internal Revenue Service (IRS) has issued final rules on the ACA’s new fee that affects any policy year or plan year ending on or after October 1, 2012, and before October 1, 2019.


Important Information: The final rule shows that the IRS made few changes from the proposed rule. The following information includes key points from the final rules:

  • The fee applies multiple times if health benefits are provided to one individual through more than one policy or self-insured arrangement
    • For an employee covered by both a group insurance policy and a health reimbursement arrangement (HRA), the group insurance policy falls within the definition of a specified health insurance policy and the fee applies to the insurer, while the HRA falls within the definition of an applicable self-insured health plan, so that the fee applies to the plan sponsor.
  • The final rule also applies PCORI fees to policies and plans that provide accident and health coverage to retirees, including retiree-only policies and plans. And it states explicitly that COBRA and other types of continuation coverage must be taken into account in determining PCORI fees, unless the arrangement is otherwise excluded.
  • There are four permissible methods of counting average lives subject to the fee.
  • The fee does not apply to any insurance policy to the extent that the policy provides for an EAP, disease management program, or wellness program, if the program does not provide significant benefits of medical care or treatment
  • HRAs and health FSAs that do not satisfy the requirements to be treated as an excepted benefit are included in the definition of applicable self-insured health plan.
  • The final rule does not permit reporting and payment of the fee by a third party or affiliated insurer. The IRS believes that the administrative complexity of these reporting and payment systems is not justified because the fee is temporary.
For further information click here.

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