Tax to Fund the Patient-Centered Outcomes Research Trust Fund

April 19, 2012

The Internal Revenue Service on April 12 released a 61 page proposed regulation on the tax on group health plans which will fund Obamacare’s Patient-Centered Outcomes Research Trust Fund.   The insurance company pays the tax for an “insured” group health plan, and the plan sponsor pays the tax for a “self-insured” group health plan.  However, the proposed regulation clearly suggests that a group health plan will be treated as an “insured” group health plan only if 100% of the plan’s benefits are provided under an insurance policy.  Thus a plan sponsor appears to be responsible for the tax unless 100% of the plan’s benefits are provided under an insurance policy.  The tax for calendar year plans for 2012 is $1 times the average number of covered “lives” under the plan, and the tax for 2012 will be due no later than July 31, 2013. The tax will double for 2013 and then go up some more each year while the tax is in effect so the tax might be more than a rounding error down the road.  Click here to read a copy of the proposed regulation. Please contact Don Kohla or Jan Marsh for additional information.

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