The annual PCORI fees deadline is always July 31. Since that falls on a Saturday this year, however, employers and health insurers offering self-funded health insurance plans will need to pay the fees by the extended deadline of August 2.
Via Form 720, health insurers and plan-sponsors offering self-funded insurance plans will need to pay the annual fee to the Patient-Centered Outcomes Research Trust Fund Fee. Fees will need to be paid using the Electronic Federal Tax Systems (EFTPS).
The Patient-Centered Research Institute (PCORI) fee rate for policy plan years that end on or after October 1, 2020 and before October 1, 2021 is $2.66 per covered individual. This is a slight increase from policy plan years that ended on or after October 1, 2019 and before October 1, 2020 where the applicable dollar amount per individual was $2.54.
For a full list of the applicable PCORI fees, head to the IRS PCORI Q&A.
Employers and policy administrators should note that the PCORI is calculated off the average number of individuals covered for a particular plan year. As a reminder, all parties enrolled in the plan are to be counted, which includes spouses, dependents, retirees, and recipients of COBRA.
First established under the ACA, the Patient-Centered Outcomes Research Trust Fund fee is a fund that self-funded health insurance policies and plan sponsors of applicable self-insured health plans must pay to aid the Patient-Centered Outcomes Research Institute (PCORI).
Through research, the PCORI institute assists patients, clinicians, purchasers and policy-makers in making more informed health decisions by advancing the quality and relevance of evidence-based medicine. The PCORI institute compiles and distributes comparative clinical effectiveness research findings.
PCORI fees were originally set to expire in 2020, but in 2019, via Trump’s Further Consolidated Appropriations Act of 2020, PCORI and the associated fees were extended through 2029.
Employers that need assistance calculating PCORI fees and making payments should consider partnering with an ACA vendor who offers a complete, all-in-one software package that includes PCORI obligations as part of its ACA compliance solution.
It should be noted that failing to pay the PCORI fees by the mandated deadlines could result in penalty assessments under IRC 6651, since PCORI fees are considered an excise tax.
For information on ACA penalty amounts, affordability percentages, important filing deadlines, steps for responding to penalty notices, and best practices for minimizing IRS penalty risk, download the ACA 101 Toolkit.