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IRS Finally Releases Updated 2019 PCORI Tax Rates

This week the IRS finally announced the applicable per participant PCORI tax rates for group health plan with Plan Year ending during the last three months of 2019.  The applicable rate will be $2.54 per participant.

When the PCORI tax was introduced as part of the Affordable Care Act, it went into effect for Plan Years ending on or after October 1, 2012.  The ACA provided for the tax to increase each year based on inflation with the increased rates going into effect each subsequent October 1.  The increases have historically been announced by the end of each calendar year.  Because the PCORI tax payments are due by July 31 of the following calendar year insurers and Plan Sponsors of self-insured group health plans had plenty of time to calculate their tax and prepare their filings.

Under the terms of the ACA, the PCORI tax would not apply to any Plan Years ending on or after September 30, 2019.  Therefore, there was no need for the IRS to issue an annual increase for Plan Years ending in the fourth quarter of 2019.  However, on December 20, 2019, President Trump signed the “Further Consolidated Appropriations Act” into law. The Act extended the PCORI tax for another 10 years.

At that point, plans with Plan Year ending during the first 9 months of 2019 knew that their tax rate for payments due this July would be $2.45 but we did not know the $2.54 rate for Plan Years ending during the last three months of 2019 until this week.

The new rates were announced in IRS Notice 2020-44.  Additionally, this week the IRS published an updated version of  Form 720 to reflect the extension of the PCORI tax and the new rate for Plan Years ending in late 2019.  Insurers and Plan Sponsors of self-insured group health plans may complete their filings and make their tax payments at this time.” 

More information about the PCORI tax, including which plans are required to file a return and pay the tax, as well as instruction for completing the process are available in a guide we wrote for clients this month.  It is available online here.

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Update on New Section 125 Plan Rule Changes


Admin America, Inc. in-house attorney and President, Trey Tompkins, presents an update on recent federal rule changes impacting employee benefit plans.

Covered topics include:

  • IRS Notice 2020-33
  • IRS Notice 2020-29
  • EBSA Disaster Relief Notice 2020-01
  • 26 CFR Part 54 Final Regulation
  • Revised COBRA Model Notices
  • CARES Act Eligible Medical Expense Changes
  • IRS Notice 2020-18

If you have any questions, post them in the Q & A Forum here

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Federal Government Responses To The Coronavirus Pandemic Impacting IRS Extension

Yesterday, the federal agencies that have primary oversight over employer sponsored group health plans published a joint directive that impacts most of Admin America’s clients and their benefits advisors.  We wanted to send you this brief update to help you better understand how the group health plans you work with are impacted by that directive.

Due to the Covid-19 pandemic, the IRS and U.S. Department of Labor’s Employee Benefits Security Administration have temporarily suspended several plan related deadlines that might otherwise jeopardize an individual’s eligibility for coverage or their ability to file claims.  This will provide an extension of time for Plan Participants and Plan Sponsors to meet certain relevant deadlines. These extensions are mandatory for all impacted plans. 

Of the types of deadlines listed below, those that are impacted by this new guidance are those that would have otherwise occurred on or after March 1, 2020.  The impacted deadlines include:

  • the time periods individuals have to enroll in group health coverage pursuant to a HIPAA special enrollment right (such as loss of group health plan coverage sponsored by another employer or a life event such as a marriage, birth of a baby or an adoption);
  • the amount of time a Plan Participant has to submit claims for benefits (this provision is of particular importance to FSA and HRA plans sponsors whose 2019 claims filing deadline was March 31, 2020);
  • the amount of time a Plan Participant has to file an appeal of any denial of a claim for benefits;
  • the amount of time a COBRA Qualified Beneficiary has to elect COBRA continuation coverage or to make payments for the cost of continuation coverage; and
  • the amount of time a Group Health Plan has to send a Qualified Beneficiary of their rights under COBRA.

The impacted deadlines are suspended until at least 60 days after the declared National Emergency related to the Covid-19 pandemic is cancelled.  Admin America will be sending out additional communications in the coming weeks to impacted clients regarding our procedural responses to this guidance.  In the interim, impacted FSA and HRA plan sponsors may want to notify their Plan Participants of the opportunity to re-file any claims that were denied last month because they had been submitted after a March or April deadline.

If you would like to review the actual release, it can be found online here.

If you have any immediate questions about this information, please call Admin America, Inc at 770-992-5959 or 1-800-366-2961.