Another year, another PCORI fee and filing. As a reminder, the Affordable Care Act (ACA) requires health insurance issuers and self-insured plan sponsors to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). Thanks to the SECURE Act passed late in 2019, the fee applies to plan years ending through October 1, 2029.
All medical plans are responsible for paying PCORI fees. The fees are reported and paid annually using IRS Form 720 and are due by July 31st of each year, generally covering plan years that end during the preceding calendar year. The insurer pays the fee on behalf of the policyholder when a plan is fully-insured. When a plan is self-funded, the employer/plan sponsor must file the Form 720 and pay the fee. This includes health reimbursement arrangements that are integrated with fully-insured medical plans and ICHRAs. However, health reimbursement arrangements integrated with a self-funded medical plan with the same plan year, as well as excepted benefits, are exempt.
The applicable fee reported is based on the number of plan participants and varies depending on when the plan year ends. Below is a summary of the fees applicable to plan years ending in 2022 and 2023. For example, according to the below chart, a calendar year plan ending on December 31, 2022, is responsible for a fee of $3.00 per covered life.
|
Plan Years Ending: |
Applicable Fee |
|
October 2021 through September 2022 |
$2.79 |
|
October 2022 through September 2023 |
$3.00 |
As a reminder, there are four different methods employers may choose to use for purposes of reporting and paying the PCORI fee: actual count, snapshot count, snapshot factor, and Form 5500 method. More detailed information regarding PCORI fees may be found on the IRS website.
Action Items
Employers should review the plans they sponsor to determine which plans are subject to PCORI fee filings and determine whether the employer as the plan sponsor or the insurer is responsible for filing the PCORI fees. Self-funded plan sponsors must next choose a method for calculating the covered lives to report the fee on Form 720 and make any applicable payment. Our Benefit Consultants and Financial Analysts can provide assistance with this process.
If you have additional questions, please contact your HUB HORAN Benefit Consultant at 800.544.8306.
The information contained in this document is informational only and is not intended as, nor should it be construed as, legal or accounting advice. Neither HUB HORAN nor its consultants provide legal, tax nor accounting advice of any kind. We make no legal representation, nor do we take legal responsibility of any kind regarding regulatory compliance. Please consult your counsel for a definitive interpretation of current statute and regulation, and their impact on you and your organization.
