ICHRA and PCORI?

[Ken_BenefitScape]

There seems to be some confusion about whether the Carrier pays bthe PCORI or the employer (sponsor)? I believe its the sponsor's responsibility.  Comments?

[Brian Gilmore]

I take the position that the standard PCORI rules for an HRA integrated with a fully insured plan also apply to an ICHRA.  So the employer must file the Form 720 and pay the PCORI fee for the employees (but not dependents) covered by the ICHRA.

More details:

https://www.theabdteam.com/blog/aca-pcori-fee-increases-to-2-66-for-2020-calendar-year-plans/

Does the PCORI Fee Apply to HRAs?

Yes, an HRA is a self-insured health plan.  However, the PCORI rules provide an exception to the fee requirement for an HRA where it is offered along with a self-insured major medical plan that has the same plan year as the HRA.  This avoids the need to pay the PCORI fee for both the HRA and the self-insured major medical plan (i.e., each person covered by both plans is counted only once for purposes of determining the PCORI fee).

There is no exception from the PCORI fee for an HRA offered along with fully insured major medical coverage.  While the insurance carrier is responsible for paying the PCORI fee for the fully insured medical plan, the employer is responsible for paying the PCORI fee on the HRA.   The IRS is essentially double-dipping in this scenario by imposing the PCORI fee on the same lives covered by both the major medical and the HRA.  In recognition of this, the HRA PCORI fee paid by the employer is determined by counting only one life per employee participating in the plan (and not dependents).

Summary: The PCORI fee is required for an HRA unless it is paired with a self-insured major medical plan that has the same plan year as the HRA.  Where the PCORI fee is required, the employer is responsible for filing the Form 720 and paying the PCORI fee for an HRA solely for the covered employees (not dependents).

[acm_acm]

Why would the employer pay the fee if the employee isn't enrolling in the employer's self-insured GHP?

Presumably an employee using the ICHRA purchases insured coverage and the issuer pays the fee for that.

[Brian Gilmore]

HRAs are a self-insured group health plan.  That includes an ICHRA.

The special HRA PCORI rule I highlighted above (re not counting dependents for HRAs integrated with fully insured coverage) does attempt to address this double-dipping issue.

[Scott A. Davis]

acm_acm, Brian is correct, Plan Sponsor/Employer is responsible for the ICHRA PCORI Fee.  Even Premium Only ICHRA per the IRS.  If you need the link I can send it.