The IRS recently released Notice 2023-70, which outlines the Patient-Centered Research Institute (PCORI) fee rate for plan years ending on or after October 1, 2023 and before October 1, 2024. For these plans, the PCORI fee rate is $3.22 per covered life. For reference, the PCORI fee rate previously announced for plan years ending on or after October 1, 2022, and before October 1, 2023, is $3.00 per covered life.
Plans Subject to the PCORI Fee
Employers who sponsored self-insured group health plans, including level funded plans and health reimbursement arrangements (HRAs), must pay the PCORI fee by July 31, 2024.
The annual PCORI fee was established as part of the Affordable Care Act (ACA) to help fund research regarding the effectiveness of medical treatments so patients, clinicians, purchasers, and policy-makers can make informed health decisions. Insurance carriers are responsible for paying PCORI fees on behalf of fully insured plans and employers are responsible for paying the fee on behalf of self-insured plans.
PCORI Fee Calculations
The PCORI fee is determined by the number of covered lives under each self-insured health plan and the applicable rate per covered life, as summarized below:
PCORI Fee = Rate Per Covered Life x # of Covered Lives Under the Self-Insured Plan
Importantly, the applicable rate per covered life is determined by a plan year’s end date and is increased each year depending on the value of national healthcare expenditures. For the next filing due, employers will pay the fee for self-insured plan years ending in 2023, with rates as follows:
|Plan End Dates||PCORI Fee Rate|
|For plan years that END January 2023 through September 2023||$3.00 per covered life|
|For plan years that END October 2023 through December 2023||$3.22 per covered life|
For more on the PCORI fee, see the IRS PCORI Fee Q&A.
Employer Action Items
- Employers that only sponsored fully insured plans in 2023 have no action item (insurance carriers are responsible for paying the fee for these plans).
- Employers that sponsored self-insured plans in 2023 (including level funded plans or HRAs) should calculate the PCORI fee, report the fee on IRS Form 720, and pay PCORI fees to the IRS by July 31, 2024.
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