Do groups need to file and pay PCORI fees if they offer an FSA?
Q: Do groups need to file and pay PCORI fees if they offer an FSA? Do groups have to file twice if group benefits run on calendar year, but the renewal and FSA run on different months?
For example, a May 1 level-funded group with a medical plan that runs calendar year has an FSA that runs May 2025 through April 2026. Does the employer need to file two?
A: In short, an FSA is not subject to the PCORI fee if it is an excepted benefit. This means the employer cannot contribute more than $500 to the FSA (unless it is structured as a match) and employees eligible for the FSA must be eligible for the company’s group health plan. If the FSA meets these requirements, no PCORI fee is due.
In the second question, if the FSA is excepted, then no PCORI is needed, regardless of whether it operates on a different plan year. The level funded plan will need to pay the PCORI fee.
If the employer had an HRA and a level funded plan (i.e., two self-funded plans), or an FSA that is NOT excepted and a level-funded plan, two PCORI fees are due unless the two plans have the same employer-sponsor and operate on the same plan year.
Links & Helpful Resources
- This helpful chart provides clarification for applying the PCORI fee to various types of health coverage.
- FAQs: PCORI FEE Frequently Asked Questions
For help understanding and strategically managing your benefit's plan, contact an SSG Advisor.
SOURCE: Answers to the Question of the Week are provided by United Benefit Advisors (UBA) and Kutak Rock LLP. Kutak Rock provides general compliance guidance through the UBA Compliance Help Desk, which does not constitute legal advice or create an attorney-client relationship. Please consult your legal advisor for specific legal advice.
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