The Patient-Centered Outcomes Research Institute (PCORI) fee is due annually by July 31.
When
The Patient-Centered Outcomes Research Institute (PCORI) fee is due annually by July 31. Use the second-quarter Form 720 to make your payment. (Note: Although Form 720 is a quarterly form, you only have to pay the PCORI fee once a year.)
The IRS has adjusted the PCORI fee to $3.22 per covered life. This year’s amount is up 22 cents from last year’s fee of $3 per covered life.
This year’s fee applies to health plan years ending on or after Oct. 1, 2023, and before Oct. 1, 2024. This period includes 2023 calendar plan years.
What
Health insurers and self-insured health plans pay the fee each year to fund PCORI’s research. PCORI fees cannot be paid with plan assets. Employers or plan sponsors are responsible for this payment, depending on the type of plan and whether it’s self-insured or fully insured.
Health insurers pay the fee for fully insured plans. This fee is built into premiums. As an employer, you don’t need to pay the PCORI fee for a fully insured health plan.
If your health plan is self-insured, you are responsible for the PCORI fee each year.
The fee typically applies to major medical plans and health reimbursement arrangements (HRAs).
The following examples most commonly require a PCORI fee:
- Fully insured medical plans
- Self-insured medical plans
- Fully insured medical plans with an HRA
This IRS chart lists common types of plans subject to the PCORI fee, as well as those that are not. For example, it does not apply to dental and vision plans, health savings accounts or excepted benefit flexible spending accounts.
The fee for fully insured and self-insured medical plans is based on the average number of total plan participants. This amount includes employees, dependents, retirees and COBRA beneficiaries, notes the insurance, financial services and HR consulting firm OneDigital.
The fee for HRAs depends on whether these accounts are offered alongside fully insured or self-insured health plans. With a fully insured health plan, you, as the employer, would pay the PCORI fee for the HRA. In this case, the fee is based solely on employee participants. It does not include dependents.
If you offer and HRA alongside your self-funded or level-funded health plan, you do not make an additional payment for the HRA. The PCORI fee for your self-funded health plan is all you need to pay.
As noted above, the PCORI fee is based on the average number of total lives a plan covers. To calculate this number, use the information provided by the IRS or work with your benefits adviser.
Why
The independent nonprofit PCORI researches ways to support patients, caregivers and clinicians. It aims to help them better understand health care choices, treatments and decisions.
Among PCORI’s many research topics are:
- Mental health
- Cancer
- Diabetes
- Maternal mortality
- Opioid addiction
PCORI also prioritizes health research based on social needs. Recent projects include investigations into:
- Ethical issues of artificial intelligence in health care
- Telehealth psychiatry
- Health outcomes based on race, ethnicity, gender and age
- The health impact of socioeconomic status
- Individuals with multiple chronic health conditions
Your adviser can help.
For more information on calculating the PCORI fee and filing your payment, talk to your team at Bender Insurance Solutions. They can help you understand IRS Form 720 and applicable payments.
