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 Date	Fee Per Average Covered Life
Feb. 1, 2015–Oct. 1, 2015 Nov. 1, 2015–Jan. 1, 2016	$2.17 $2.26

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.

COMPARATIVE EFFECTIVENESS FEE (TAX?)

Starting in October 1, 2012 employers will pay $1 per participant on your health plan per year to fund Comparative Effectiveness Research.  The dollars will go to the Patient-Centered Outcomes Research Trust Fund and will fund a new organization call the Patient Centered Outcomes Research Institute (PCORI).  This amount will increase to $2 per participant per year in 2013.

The idea behind the fee or tax is that these dollars will go to conduct comparative effectiveness research of various medical interventions and publicly disseminate them. Whether or not this fee will go to fund decisions on your personal healthcare is yet to be seen.
  

PPACA-HEALTH REFORM UPDATE

As we all wait for the Supreme Court to rule on the future of health reform, there are items in the law that will be taking place in the near future.  Below is a listing of those items:


1)  August, 2012-Rebates will be issued by insurers if medical loss ratio is less than 80% in small group market and 85% in large group market.  Rebates will be issued at the employer level.  


2)  August, 2012-Non-Grandfathered Health plans will be required to offer coverage for Gestational Diabetes Screening and Contraceptive for non-religious, non-exempt employers.
(I  am thinking that most carriers will offer this coverage as its easier for them to manage than trying to determine Grandfathered and Non-Grandfathered eligibility)


3)  Plan years beginning after September 23, 2012-Summary of Benefits will need to be updated to include more easily readable and understandable benefit descriptions.  This responsibility will fall mainly on insurers for fully insured plans.


4)  October, 2012-Comparative Effectiveness Fee-Plans that began after 10-2-2011 will be required to pay $1 per covered life for research to determine effectiveness of medical treatments. This is the portion of the law that concerned a great many people as they believed that these panels would undermine life saving care in place of cost savings.  This fee goes up to $2 per life in 2013 and supposedly goes away in 2019.


5)  Jan, 2013-Flexible Spending Account (FSA) spending limits capped at $2500 for Individual and $5000 for family.  Cap applies to plan years that began after December 31, 2012.


6) 2012 Tax Year-W-2's distributed in 2013 for tax year 2012 for employers who issue more than 250 W-2's will be required to include the total cost of group medical coverage.