The Affordable Care Act (ACA) requires health insurance issuers and self-insured plan sponsors to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). The fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return). The Form 720 has been updated and is available for use for the 2022 payment.
Issuers and plan sponsors are generally required to pay the PCORI fees annually by July 31 of each year. However, the PCORI fee payment for plan years ending in 2021 is due Aug. 1, 2022, since July 31, 2022, is a Sunday.
Employers who sponsor applicable self-insured health plans must file the second quarter IRS Form 720 and pay the fee; while insurers are responsible for the reporting and payment for fully-insured plans.
Using Part II, Number 133 of Form 720, plan sponsors are required to report the average number of lives covered under the plan for applicable self-insured health plans. The number of covered lives generally includes employees, retirees and their covered spouses and children. That number is then multiplied by the applicable rate for that tax year:
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- $2.66 for plan years ending on or after Oct. 1, 2020, and before Oct. 1, 2021
- $2.79 for plan year ending on or after Oct. 1, 2021, and before Oct. 1, 2022 (which includes 2021 calendar year plans)
- $2.66 for plan years ending on or after Oct. 1, 2020, and before Oct. 1, 2021
Our bulletin below contains additional information about the fee reporting and payment including FAQs. The IRS website provides handy guidance also.
Employer Next Steps
Employers with self-insured health plans should prepare for timely reporting and payment.
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For recent Compliance Check blog posts, visit: https://www.valentgroup.com/category/employee-benefits/compliance-check/
This blog and its contents are not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.