PCORI Fees to be paid by Employers?

[Richcpaman]

Has anyone else been recieving info from thier clients regarding payments of PCORI fees on IRS Form 720?

I have a client with a HRA that the provider has sent them info that the client has to file the IRS From 720 and pay $1 per enrolled employee, Next year it goes to $2.

It seems to me, and my research that the Insurance Company should be paying this fee, or who ever is filing the form 5500 for an insurance plan.

Thoughts?

Rich

[jainen]

>>the Insurance Company should be paying this fee<<

The requirement also applies to the plan sponsor. Generally that means the employer, who determines which employees are eligible, how the funds are invested, and so on.

[Richcpaman]

J;

That is my point.

What makes you the "Sponsor"?

I have a client that is being told they are the plan sponsor for an HRA with 9 people in it.

It seems to me... If your are required to file a 5500 for the plan, then you might be covered by this fee.

I would also think, that we would have been told/advised/taught that this requirement needed to be met by our clients somehow. And it isn't part of the accountant/tax world to do these things. Maybe the Insurance world.

There was a ruling, seemingly overbroad, that can require the payment of the PCORI fee for the same individuals from multiple providers.

Seems to me, that if your set up a HRA, thru an insurance provider, that then the Ins Co would be the filing party, and not the employer.

Rich

[jainen]

>>What makes you the "Sponsor"?<<

As I said before, the sponsor is the employer who sets up the plan for the company's employees. The sponsor has to file for a Health Reimbursement Account (which is NOT an insurance plan itself). Even if management was outsourced to a 3rd party, that doesn't relieve your client from filing his own tax returns and paying his own taxes. If there is also an insurance plan (unless self-insured), the insurance company must file separately for that, so the same employees will be counted and paid for twice.

What research leads you to tie Form 720 to filing requirements for Form 5500? Yes, the ruling (i.e., final regulations) rejected the proposal to aggregate employees in multiple plans, based on the specific language of the law. What do you feel is overbroad about Congress passing a law that applies to every separate plan? Never mind. There's nothing we can do about it anyway!

In my opinion, filing tax returns (including Form 720, which is titled "Quarterly Federal Excise Tax Return") is very much a part of the tax world.