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Health Care Plan Update

Along with the one-year delay on the deadline for large employers to comply with an Obamacare provision, there is another item you should be aware of with respect to the Affordable Care Act.

The Internal Revenue Service has issued guidance on the Comparative Effectiveness Fee required under the Affordable Care Act. The fee is intended to fund health outcome and clinical effectiveness research conducted by the Patient-Centered Outcomes Research Institute, a nonprofit organization created by the ACA. The Comparative Effectiveness Fee has also been referred to as the "PCORI Fee." Health insurance issuers or plan sponsors of self-insured plans will be required to pay this fee to the IRS by July 31 of the calendar year immediately following the last day of the plan or policy year. The first payments are due by July 31, 2013. Form 720 is required to be filed with the payment.

The Comparative Effectiveness Fee applies to plan or policy years ending in federal fiscal years 2013 through 2019 (Oct. 1, 2012 through Sept. 30, 2019). For plan or policy years ending on or after Oct. 1, 2012 and before Oct. 1, 2013, the fee is $1 multiplied by the average number of covered lives. For plan or policy years ending on or after Oct. 1, 2013 and before Oct. 1, 2014, the fee will increase to $2 per covered life. The fee remains at $2 (indexed to increases in national health spending) through its conclusion with plan or policy years ending between Oct. 1, 2018 and Sept. 30, 2019.

We are advising business owners to consult with their health insurance carrier to see if they are subject to this filing requirement.

Daniel Gibson provides accounting, tax planning and consulting services to real estate and services industries and is a member of the AICPA and New Jersey Society of Certified Public Accountants.

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