PCORI fees are considered an excise tax and used to fund the Patient-Centered Outcomes Research Institute. They were introduced as part of the Affordable Care Act, and originally set to expire for plan years ending after October 1, 2019. In December 2019, the I.R.S. extended the filing of PCORI fees through December 2029. The fees for plan years ending in 2019, are due on July 31, 2020.
Group health plans must pay PCORI fees. If your group medical plan is fully insured, the fees are included as part of your health insurance premium and paid by the insurance carrier, you have no additional obligation. However, if you provide your employees with a Health Reimbursement Arrangement (HRA) you may be required to file. Additionally, employers who sponsor group medical plans that are self-funded, partially self-funded or level-funded have an obligation for filing.
The fees are assessed annually and are based on the average number of lives covered under the plan or policy. A Self-funded, partially self-funded or level-funded plan with an integrated HRA is only required to file for the core medical plan and must count employees, COBRA participants, spouses, and dependents. Fully insured plans with an integrated HRA are required to file for the HRA, due to it’s status as a self-funded plan, and must count the number of enrolled employees and COBRA participants (excluding dependents). The amount of the fee is determined on your plan year end date. The reporting must be included on IRS Form 720 as part of your quarterly tax filings due July 31, 2020. For the upcoming filing period, the fees are:
- $2.45 per covered life for plan years ending on or after Jan. 1, 2019, through Sept. 30, 2019
- $2.54 per covered life for plan years ending on or after Oct. 1, 2019, through Dec. 31, 2019, 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:
HCR Patient Centered Outcomes Research Institute FeesForm 720 and Instructions
