Q: PCORI fees are due July 31, 2023. What are these fees, and is my company required to pay them?
A: PCORI fees were introduced as part of the Affordable Care Act and must be filed for plan years through December 2029. The fees are an excise tax on health plans and used to fund the Patient-Centered Outcomes Research Institute.
The PCORI Fees are required for employers who have medical plans that are self-funded, partially self-funded, or level funded. Health Reimbursement Arrangements (HRAs) are considered self-funded group health plans and are generally required to pay the PCORI fees. This includes a fully insured plan integrated with an HRA, Individual Coverage HRA (ICHRA), and Qualified Small Employer HRA (QSEHRA).
If your group medical plan is fully insured and does not have an HRA, you do not have an obligation to pay the fees. The fees are included as part of your health insurance premium and paid by the insurance carrier. This also includes fully insured Medigap plans.
The fees are assessed annually and are based on the average number of lives covered under the plan or policy and calculated as follows:
- A self-funded, partially self-funded, or level-funded plan must count the enrolled employees, COBRA participants, spouses, and dependents. A self-funded plan with an integrated HRA only needs to file for the core medical plan only.
- Fully insured plans with an integrated HRA must count the number of enrolled employees and COBRA participants (excluding dependents).
- ICHRA and QSEHRA must count enrollment based on the number of enrolled employees and COBRA participants (excluding dependents).
The fees for plan years ending in 2022 are due on July 31, 2023. The amount of the fee is determined on the plan year-end date. The reporting is included on IRS Form 720 as part of your quarterly tax filings due July 31, 2023. The fees for the upcoming filing period are:
- $2.79 per covered life for plan years ending on or after Jan. 1, 2022, through Sept. 30, 2022.
- $3.00 per covered life for plan years ending on or after Oct. 1, 2022, through Dec. 31, 2022, including calendar year plans.
If your company’s medical benefits are supported by Liberty Insurance Agency, and you are required to comply with the PCORI fee filing, you will be receiving a personalized email with information specific to your plan and requirements. Otherwise, if we can be of any further assistance, don’t hesitate to contact our Compliance Consultant, Gina Conroy, at 412-571-5700 ext. 305 or ginaconroy@libertyins.com.
For specific advice regarding this filing and paying the PCORI tax, please consult with your company’s tax advisor.
Employer Resources:
Patient-Centered Outcomes Research Institute (PCORI) Fees
Form 720 and Instructions
