Alerts

Prescription Drug Reporting Deadline – June 1.

This is a reminder that the Prescription Drug Data Collection (RxDC) report for the 2024 calendar year is due on Sunday, June 1, 2025. All group health plans (and health insurance issuers) are required to submit this annual report, which includes data on prescription drug costs and other health care spending.

Key points to remember:

1. Deadline: June 1, 2025 (Note: vendors may require information earlier)
2. Reporting Period: Calendar year 2024 (applies to all group health plans, including those with non-calendar year plan years)
3. Submission Method: Online portal maintained by the Centers for Medicare and Medicaid Services (CMS)

Employer Actions:

1. Confirm that your third-party vendor (insurer, TPA, or PBM) will submit the report on your behalf.
2. Ensure you have a written agreement with the third party outlining the responsibility for the filing.
3. Promptly respond to any information requests from your reporting vendor.
4. For self-insured plans, monitor your third party's compliance with the reporting requirement.
5. Employers who changed insurers or PBMs mid-calendar year need to coordinate with both previous and current vendors to ensure the filing is completed for the entire calendar year.

Remember, even if using a third party for submission, employers may need to provide plan-specific information such as enrollment and premium data. Stay proactive to ensure timely and accurate reporting.

What are the key changes in the 2024 RxDC reporting instructions

The aggregation of data will now be tied to the reporting entity. That means that if the reporting entity is the plan, the data it reports must be plan-level data. That was the rule last year, but it had not been enforced by CMS. The bottom line for employers is that they cannot rely on carrier-level data if they are required to file a plan-level report (as most self-funded plans will need to do). Since TPAs are expected to file that information, it should not pose a significant burden for employers. However, they will need to monitor the filing to ensure the TPA completes it on their behalf.

Employers should work closely with their plan vendors to assist with RxDC reporting to avoid potential late filing penalties.

Most vendors and reporting entities will request some data. That will typically include the Group Health Plan Name and Related Information (P2 data) and the Average Monthly Premium (D1 data) from the employer. They may ask the employer to provide the required information well in advance of the June 1 filing deadline. Therefore, employers should be on the lookout for those requests and respond timely to ensure the vendor can file on their behalf. If the vendor is unable to file, the employer would need to file on its own or find a different vendor to file at the 11^th hour. Failure to file timely can result in a penalty of up to $100 per day, per affected plan participant.

Annual Form 5500

Plans with more than 100 participants are required to file annual Forms 5500 with the Department of Labor annually. For calendar year plans, the due date is July 31 (with one extension to October 15. The extension is automatically permitted if the plan files Form 5558 timely). Non-calendar year plans are required to file the 5500 7 months after the end of the plan year (which can also be extended 2 ½ months with Form 5558).

PCORI Reporting

All group health plans must pay the excise tax to fund the Patient-Centered Outcomes Research Institute (PCORI) annually but July 31. That deadline applies for all plans regardless of their plan year (see below for the distinction in how the tax is assessed). The plans use IRS Form 720 (Quarterly Federal Excise Tax Return).

Fully insured plans can rely on the insurance carriers’ filings as they would include the tax and filing obligations for all the plans under the insurers’ contracts.

Self-funded plans will have to pay and file the tax or hire a vendor to do so on their behalf.

The tax is adjusted annually. In 2025, the excise tax for plans with plan years ending between October 1, 2024, and December 31, 2024 - $3.47 is per covered life, and for plans with plan years ending between January 1, 2024, and September 30, 2024, the excise tax is $3.22 per covered life. 

Conclusion

Employers have ongoing responsibility for many information and tax filings for their group health care plans. They can keep up to date with those obligations and track the requirements using the World Compliance Calendar. 

This Legal Update is not intended to be exhaustive, nor should any discussion or opinion be construed as legal advice. Readers should contact legal counsel for legal advice. All rights reserved.