The Affordable Care Act (ACA) imposes a fee on health insurance issuers and self-insured plan sponsors in order to fund comparative effectiveness research. These fees are widely known as Patient-Centered Outcomes Research Institute (PCORI) fees.
Employers who sponsor applicable self-insured health plans must file the second quarter IRS Form 720 and pay the fee. The form 720 has been updated and is available for use. The form and fee payment are due each year by July 31 of the year following the last day of the plan year. For plans ending in 2020, the next PCORI fee payment will be due Aug. 2, 2021, since July 31, 2021, is a Saturday.
The IRS issued Notice 2020-84 with the fees for the upcoming submission. The adjusted fee amount is based on your plan year:
- $2.54 for plan years ending on or after Oct. 1, 2019, and before Oct. 1, 2020
- $2.66 for plan years ending on or after Oct. 1, 2020, and before Oct. 1, 2021
The fee amount is multiplied by the average number of covered lives during the plan year to determine the total amount due. The number of covered lives generally includes employees, retirees and their covered spouses and children.
If you have questions or need help, please contact one of our benefit consultants.