PCOR Fee, Form 720 Filing Due July 31
The ACA imposed the PCOR fee on health plans to support clinical effectiveness research. The PCOR fee applies to plan years ending on or after October 1, 2012, and before October 1, 2029. The PCOR fee is generally due by July 31 of the calendar year following the close of the plan year.
PCOR fees are required to be reported annually on Form 720, Quarterly Federal Excise Tax Return, for the second quarter of the calendar year. Plan sponsors that are subject to PCOR fees but no other types of excise taxes should file Form 720 only for the second quarter.
The PCOR fee is generally assessed based on the number of employees, spouses and dependents covered by the plan. The fee for policy and plan years ending on or after October 1, 2021, but before October 1, 2022, remains at the applicable rate of $2.79, multiplied by the average number of lives covered under the plan. For plan years ending on or after October 1, 2022, but before October 1, 2023, the fee is increased to the applicable rate of $3.00, multiplied by the average number of lives covered under the plan.
The PCOR fee can be paid electronically or mailed to the IRS with the Form 720 using a Form 720-V payment voucher. According to the IRS, the fee is tax-deductible as a business expense.
As a reminder, the insurer is responsible for filing and paying the fee for a fully insured plan. The employer plan sponsor is responsible for filing on a self-insured plan, including an HRA. A stand-alone dental or vision HRA would be excepted and would not be subject to the PCOR fee.
How is the PCOR filing impacted if a fully insured medical plan with HRA switches to a self-insured medical plan with HRA in 2023?
New Healthcare Laws Address Pharmacy Benefit Savings and Ambulance Coverage
May 23, 2023
Recently, Gov. Huckabee Sanders signed several healthcare bills into law.
Act 333 (previously HB 1481) requires that prescription drug rebates be shared with enrollees. Specifically, under Act 333, an enrollee’s cost-sharing for a prescription drug at the point of sale must be based on a price that is reduced by all rebates received, or to be received, in connection with the dispensing or administration of the drug. Act 333 is directed at both insurers and pharmacy benefit managers and requires pharmacy benefit managers to submit an annual attestation of compliance to the state’s Insurance Commissioner.
Act 480 (previously HB 1261) requires that on and after January 1, 2024, a healthcare insurer that offers, issues, or renews a health benefit plan in the state must provide coverage:
- For an ambulance service to:
- Treat an enrollee in place if the ambulance service is coordinating the care of the enrollee through telemedicine with a physician for a medical-based complaint or with a behavioral health specialist for a behavioral-based complaint; or
- Triage or triage and transport an enrollee to an alternative destination (e.g., urgent care center, physician’s office or medical clinic) if the ambulance service is coordinating the care of the enrollee through telemedicine with a physician for a medical-based complaint or with a behavioral health specialist for a behavioral-based complaint; or
- For an encounter between an ambulance service and enrollee that results in no transport of the enrollee if:
- The enrollee declines to be transported against medical advice; and
- The ambulance service is coordinating the care of the enrollee through telemedicine with a physician for a medical-based complaint.
The coverage applies if the initiation of the ambulance service treatment is because of a 911 call and is subject to health benefit plan deductibles or copayments, among other requirements.
Group health plan sponsors may want to be aware of these new laws and should contact their carrier or pharmacy benefit manager, as applicable, for further information.
Division of Insurance Releases First Annual Report on Healthcare Sharing Plans and Arrangements Operating in the State
May 23, 2023
The Colorado Division of Insurance has released its first annual report on healthcare sharing plans and arrangements (HCSAs) operating in the state, calling it just “the first step in finding out more about HCSAs and how they work” so that the Division “can help Colorado consumers to know what they are getting, and, more importantly, what they aren’t getting, when they look at HCSAs.”
The product of legislation passed last year in response to consumer complaints and other concerns about these programs, which generally charge membership fees resembling health insurance premiums but rely principally upon charity care, consumer support organizations, and the voluntary goodwill of other program members to cover medical expenses. Many HCSAs also operate with a religious orientation and often exclude benefits such as contraception coverage, mental health services, alcohol use disorder treatments, ADHD treatments, prescription drugs for chronic conditions, comprehensive reproductive health coverage, abortion and pre-existing conditions.
Issues like these have resulted in some HCSA members being left “stuck with [medical bills] for thousands of dollars,” demonstrating that “people are clearly not getting the full story from the companies when they sign up for HCSAs,” according to the Colorado Insurance Commissioner Michael Conway.
The legislation required HCSAs operating in Colorado to report 2021 membership (including employer groups), financial, marketing efforts, producer and other related data to the state, but full compliance was spotty. In the end, 16 HCSAs with a total combined membership of 67,876 Coloradans (five of which included employer groups) submitted reporting data to the state, though all 16 reports were deemed ultimately incomplete.
14 of the 16 HCSAs submitted financial data, reporting a combined total dollar amount of costs or services that were submitted for sharing of $361,782,968.53, compared to $97,393,551.95 in total fees, dues, shares, contributions, and other payments collected from Colorado members in 2021, which equals 26.7% of members’ healthcare costs.
After adjusting those amounts for duplicate charges, ineligible charges based on sharing guidelines, discounts negotiated on their members' behalf, and the members’ agreed upon portions of medical bills, $131,984,548.13 of members’ total 2021 healthcare costs qualified for sharing, resulting in an adjusted figure of 74% of total eligible share requests covered.
At least seven HCSAs reported working with a total of 862 producers to enroll 4637 members or 35.2% of the enrollment of those seven HCSAs. However, HCSAs are not required to report the name, business, or license number of individual producers, so that 862 count likely includes double counting.
Because the data collected was incomplete, the report itself is not as comprehensive as the Division would prefer, and efforts are underway to obtain complete 2021 data by June 2023 and 2022 data by early fall of 2023.
Amendment Updates Cost-Sharing Requirements for Diagnostic Breast Cancer Screenings
May 23, 2023
Recently, Gov. Kemp signed House Bill 315, which amends the insurance regulations to require that a health benefit policy that provides coverage for diagnostic examinations for breast cancer shall ensure that the cost-sharing requirements applicable to diagnostic and supplemental breast screening examinations are no less favorable than the cost-sharing requirements applicable to screening mammography for breast cancer.
However, if this cost-sharing requirement would result in HSA ineligibility, the cost-sharing shall only apply after the HDHP minimum deductible is met (unless the items or services are excepted preventive care).
Employers that sponsor insured plans should be aware of the new coverage requirements, which will apply to all insurance policies issued, delivered, issued for delivery, or renewed on or after January 1, 2024.
Governor Signs Legislation to Ensure Network Adequacy
May 23, 2023
Gov. Kemp recently signed the Consumer Access to Contracted Healthcare Act (CATCH Act), which amends the state’s Surprise Billing Consumer Protection Act to ensure participant access to quality healthcare by setting adequacy standards for network plans offered by an insurer and providing for telehealth services, among other items.
Specifically, the CATCH Act requires an insurer providing a network plan to contract with and maintain a network of participating providers in sufficient number and appropriate type, including primary care and specialty care, pharmacies, clinical laboratories and facilities, throughout such plan's service area to ensure covered persons have access to the full scope of benefits and services covered under such plan.
Similarly, an insurer providing coverage for mental health or substance use disorders as part of a network plan shall contract with and maintain a network of participating providers that specialize in mental health and substance use disorder services in sufficient number and appropriate type throughout such plan's service area to ensure covered persons have access to the full scope of mental health and substance use disorder benefits and services covered under such plan.
Additionally, the CATCH Act provides numerous protections for telehealth services. For example, insurers are prohibited from requiring prior authorization, medical review or administrative clearance for a telehealth service that would not be required if such service were provided in person. Insurers also must not deny coverage of a telehealth service based solely on the communication technology or application used to deliver such service.
Beginning January 1, 2025, and annually thereafter, insurers will be required to report data to show compliance with the CATCH Act. Although the new provisions are primarily directed at insurers, employers that sponsor insured group health plans may want to be aware of the requirements.
Mandated Coverage for Biomarker Testing
May 23, 2023
On May 3, 2023, Gov. Moore signed HB 1217/SB 805 into law. The law requires health insurers in Maryland to cover biomarker testing when supported by medical and scientific evidence. Cost-sharing for biomarker testing may not be greater than cost-sharing for similar covered services. As of January 1, 2024, the law applies to policies issued or delivered in the state. Employers sponsoring health plans in Maryland should be aware of this development and contact their carriers for further information.
Restrictions on Step Therapy or Fail-First Protocol
May 23, 2023
On May 3, 2023, Gov. Moore signed HB 785/SB 515 into law, addressing protocols imposed by health insurers that require an insured to use a certain prescription drug or sequence of prescription drugs before covering a prescription drug ordered by a provider (known as “step therapy” or “fail-first” protocols).
Specifically, the law requires health insurers in Maryland to establish a process for insureds to request an exception to a step therapy or fail-first protocol, with deference to the prescriber. The law also prohibits requiring more than a certain number of prior authorizations for a prescription for different dosages of the same prescription drug. As of January 1, 2024, the law applies to policies issued or delivered in the state. Employers sponsoring health plans in Maryland should be aware of this development and contact their carriers for further information.
Mandated Coverage for Breast Cancer Screenings
May 23, 2023
On May 3, 2023, Gov. Moore signed HB 376/SB 184 into law. The law prohibits health insurers in Maryland from imposing cost-sharing on coverage for diagnostic breast examinations and supplemental breast examinations, with the exception of required cost-sharing under a qualified HDHP prior to meeting the deductible. As of January 1, 2024, the law applies to policies issued or delivered in the state. Employers sponsoring health plans in Maryland should be aware of this development and contact their carriers for further information.
Mandated Coverage for Lung Cancer Screenings
May 23, 2023
On May 3, 2023, Gov. Moore signed HB 815/SB 965 into law. The law requires health insurers in Maryland to cover follow-up diagnostic lung cancer screenings without cost-sharing, with the exception of required cost-sharing under a qualified HDHP prior to meeting the deductible. As of January 1, 2024, the law applies to policies issued or delivered in the state. Employers sponsoring health plans in Maryland should be aware of this development and contact their carriers for further information.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.