Tuesday, April 25, 2017

Comparative Effectiveness Research Fee in 2017

Information about the Comparative Effectiveness Research Fee in 2017

The Affordable Care Act imposes an annual fee called the Comparative Effectiveness Research Fee (CERF) on insurers and plan sponsors of self-insured coverage to help fund the Patient-Centered Outcomes Research Institute. This information includes a brief review of CERF to help answer your questions and prepare you for this year’s payment.

2017 CERF Payment Details
The fee is based on the average covered lives for the applicable 12-month policy or plan year, and is paid using IRS Form 720 by July 31 each year for the plan year that ended in the preceding calendar year. It’s important to remember that employers must use their ERISA plan year if it is different from the renewal date. The fees for 2017 are:

Plan Year Start DateFee Per Average Covered Life
Feb. 1, 2015–Oct. 1, 2015
Nov. 1, 2015–Jan. 1, 2016

Who Is Responsible for Paying?
  • The Insurance Carrier pays the fee for insured plans (including guaranteed cost, shared returns, and minimum premium plans), and it is built into premiums.
    • Health Reimbursement Accounts (HRAs) and certain Flexible Spending Accounts (FSAs) are considered self-funded group health plans. The Insurance Carrier will pay the fee for the underlying medical policy only; clients are responsible for the HRA/FSA related fee.
  • Self-funded plans (including level funding and graded preferred plans) must calculate and pay their own fee.