PCORI Fees are Extended an Additional 10 Years
As a reminder, employers that sponsor certain self-insured health plans are responsible for Patient-Centered Outcomes Research Institute (PCORI) fees. Fees for plan years that ended in 2019 are due July 31, 2020.
Under the Affordable Care Act, PCORI fees were originally scheduled to apply to policy or plan years ending on or after Oct. 1, 2012 and before Oct. 1, 2019. However, in Dec. 2019, PCORI fees were extended for an additional 10 years. Thus, the fee continues to apply for the 2020-2029 fiscal years.
Employers must report and pay the required PCORI fees annually via IRS Form 720. For plan years that ended between Jan. 1, 2019, and Sep. 30, 2019, the fee is $2.45 multiplied by the average number of lives covered under the plan.
On June 8, 2020, the IRS issued Notice 2020-44, which increases the Patient-Centered Outcomes Research Institute (PCORI) fee amount for plan years ending on or after Oct. 1, 2019, and before Oct. 1, 2020. It also provides transition relief for calculating the average number of lives covered under the plan for this period (which is what the PCORI fee is based on).
Specifically, the PCORI fee amount for plan years ending on or after Oct. 1, 2019, and before Oct. 1, 2020, is increased to $2.54 multiplied by the average number of lives covered under the plan. Plan sponsors may use any reasonable method for calculating the average number of covered lives for this period, in addition to existing methods, so long as it is applied consistently for the duration of the plan year.
As a reminder, employers of certain self-insured health plans are responsible for paying PCORI fees annually. Fees for plan years that ended in 2019 are due July 31, 2020.
For more information on filing due dates and applicable rates, click here.
