The Affordable Care Act imposes an annual fee called the Comparative Effectiveness Research Fee (CERF) on insurers and plan sponsors of self-insured coverage to help fund the Patient-Centered Outcomes Research Institute.

2017 CERF Payment Details

The fee is based on the average covered lives for the applicable 12-month policy or plan year. It is paid using IRS Form 720 and is due by July 31 each year for the plan year that ended in the preceding calendar year. It’s important to remember that employers must use their ERISA plan year if it is different from the renewal date.

Who Is Responsible for Paying?

  • The carrier pays the fee for insured plans, it is built into premiums.
  • Employers who offer self-funded plans must calculate and pay their own fee. Level funded plans are considered to be self-funded plans.
  • Health Reimbursement Accounts (HRAs) ad certain Flexible Spending Accounts (FSAs) are considered to be self-funded group health plans, employers are responsible for calculating and paying fees.

Helpful links:

https://www.irs.gov/pub/irs-pdf/f720.pdf (IRS Form 720)

https://www.irs.gov/pub/irs-pdf/i720.pdf (Instructions for IRS Form 720)