Should point solution programs be reported in Form 5500? Are they subject to the PCOR fee?

“Point solution” programs are specific services that add value to an employer’s major medical plan or benefits program. Point solution programs are generally provided through third-party vendors. They often target benefit plan enhancements that range from specific condition management to digital solutions and apps to overall benefit program simplification. Some common examples of services provided through point solution programs include fertility, musculoskeletal, developmental disability, and mental and behavioral health.

Whether ERISA (which governs the Form 5500 requirement) or the ACA (which includes the PCOR fee requirement) applies to any particular point solution program depends on whether the program provides medical care. “Medical care” is broadly defined to include amounts paid for the diagnosis, cure, mitigation, treatment or prevention of disease or for the purpose of affecting any structure or function of the body. Although each point solution program should be analyzed on a case-by-case basis, it essentially boils down to whether the program provides individualized diagnosis, treatment or prescription services for an employee (or an employee’s family member, if applicable). If it does, then the program is typically a group health plan and is therefore subject to these and other laws.

Point solution programs that provide medical care are subject to ERISA, including the Form 5500 and Summary Annual Report (SAR) reporting requirements. Point solution programs that are integrated or wrapped together with the major medical plan can comply with the Form 5500/SAR requirements by adding the program benefits to the medical plan Form 5500. Non-integrated/non-wrapped plans must file a separate Form 5500 (and they may have to do so without a Schedule A since many vendors take the position that their products are not “insurance products” subject to Schedule A reporting; see the Form 5500 Instructions for more information about filing Form 5500 without Schedule A).

Note: If your fully-insured medical plan is administered and billed by PPI, your coverages will be included in the Form 5500 filing for the ACSA or BIEB Trusts. However, any point solutions as described above are not included in the ACSA/BIEBT filing. Therefore, you will need to file them separately from what PPI files for your medical plan.

Note that point solution programs that provide significant benefits in the nature of medical care or treatment are likely considered self-insured plans that are subject to the PCOR fee. This is especially relevant for point solution programs that are structured as a reimbursement that is outside of a self-insured medical plan or pairs with a fully insured medical plan. The PCOR fee count for such point solution programs follows the same rule as for HRAs: the employer simply counts one covered life per program, exclusive of spouses, domestic partners or dependents.