Background

The Patient-Centered Outcomes Research Institute (PCORI) fee is an ACA fee that helps fund research regarding the effectiveness of medical treatments so that patients, clinicians, purchasers, and policy-makers can make informed health decisions.  The PCORI fee applies to plan years ending on or after 10/1/2012 and before 10/1/2019.

 

Who is responsible for paying the PCORI fee?

  • Self-insured health plans: Issuers of specific health insurance policies, as well as plan sponsors of applicable self-insured health plans are required to report and pay the PCORI fee.
  • Fully-insured health plans with no HRA: The health insurance carrier is responsible for reporting and paying the PCORI fee.
  • Fully-insured health plans with HRA: Employers with fully-insured plans that also sponsor a separate medical HRA must pay the PCORI fee for the HRA, while the insurer pays the fee for the fully-insured plan. In this situation, the underlying fully-insured plan and the HRA are treated separately with respect to the PCORI fee.

 

What types of health plans are subject to the PCORI fee?

Please refer to the IRS chart on what types of insurance coverage are subject to the PCORI fee. Additionally, the PCORI fee only applies to plans that cover individuals residing in the United States.

 

How much is the PCORI fee?

The fee has recently increased and will continue to increase on an annual basis due to inflation.  For plan years ending on or after 10/1/2017 and before 10/1/2018, the applicable dollar amount is $2.39.

 

When is the Deadline?

The PCORI fee must be paid using Form 720, Quarterly Federal Excise Tax Return. The deadline for filing Form 720, as well as for payment, is July 31 of the year following the year in which the plan ended.  As such, this fee will not be due again until July 31, 2018.

 

 

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Joanna Castillo– Joanna is the Client Compliance Manager for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Joanna enjoys live music, college football, travel, and walking her dog in Golden Gate Park.