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The annual PCORI fees have been extended through September 30, 2029 as a result of the Further Consolidated Appropriations Act of 2020.
Health insurers and plan sponsors offering self-funded health insurance plans will need to continue to pay the Patient-Centered Outcomes Research Trust Fund Fee via Form 720 by July 31 annually. The fee will need to be paid using the Electronic Federal Tax Systems (EFTPS).
The PCORI fees were set to expire for plans ending before October 1, 2019 before the President signed the Appropriations Act into law. It is possible that between now and 2029 that the program will be extended again.
The PCORI fee is calculated off the average number of lives covered during the policy year. That means that all parties enrolled will have to be accounted for such as dependents, spouses, retirees, and COBRA beneficiaries.
The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI), which was established by the Affordable Care Act (ACA).The institute assists, through research, patients, clinicians, purchasers and policy-makers in making informed health decisions by advancing the quality and relevance of evidence-based medicine. The institute compiles and distributes comparative clinical effectiveness research findings.
The final regulations specify that the PCORI fees also apply to short-term plan of applicable self-insured health plans; that is, plans that run shorter than 12 months in duration. The only exceptions for paying PCORI fees apply to governmental programs and programs established by federal law for providing medical care.
If your organization is subject to the PCORI fees, make sure your policies are in place to pay the fees on time as failure to pay the fee could result in IRS penalties. Since the PCORI fee is considered an excise tax, it is calculated under IRC 6651. Some third-party organizations may include PCORI coordination as a part of their ACA compliance service at no extra charge.
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