The IRS recently released Notice 2024-83, which outlines the Patient-Centered Research Institute (PCORI) fee rate for plan years ending on or after October 1, 2024 and before October 1, 2025. For these plans, the PCORI fee rate is $3.47 per covered life. For reference, the PCORI fee rate previously announced for plan years ending on or after October 1, 2023, and before October 1, 2024, is $3.22 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, 2025.
Background
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.
Previously set to expire in 2019, the fee was extended an additional 10 years and is now effective through 2029.
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 2024, with rates as follows:
| Plan Year End Dates | PCORI Fee Rate |
| January 2024 through September 2024 | $3.22 per covered life |
| October 2024 through December 2024 | $3.47 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 2024 have no action item (insurance carriers are responsible for paying the fee for these plans).
- Employers that sponsored self-insured plans in 2024 (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.
Additional Resources
Connect with a Sequoia consultant to learn how Sequoia’s compliance services are integrated in our benefits services and tailored solutions. And if you’re already a Sequoia client, stay on top of your employer obligations with your Compliance Checklist that highlights important compliance dates, action items, and resources.
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. © 2024 Sequoia Consulting Group. All Rights Reserved.
