PCORI Fees are not owed by all employers. Please read below for more details and contact us if you have any questions.
 

The ACA imposes a fee on employers with an HRA or a self-insured plan in order to fund comparative effectiveness research. These fees are widely known as Patient-Centered Outcomes Research Institute (PCORI) fees, and were originally scheduled to expire for plan or policy years ending on or after Oct. 1, 2019. However, a federal spending bill enacted at the end of 2019 extended the PCORI fees for an additional 10 years.


As a result, on June 8, 2020, the IRS increased the PCORI fee amount for plan years ending on or after Oct. 1, 2019, and before Oct. 1, 2020, to $2.54 multiplied by the average number of lives covered under the plan. It also provides transition relief for calculating the average number of lives covered under the plan or policy (which is what the PCORI fee is based on).

Transition Relief
Because of the anticipated termination of the PCORI fee prior to its extension, plan sponsors may not have anticipated the need to identify the number of covered lives for plan years ending on or after Oct. 1, 2019, and before Oct. 1, 2020. 

Specifically, plan sponsors may use any reasonable method for calculating the average number of covered lives for this period, in addition to existing methods, so long as it is applied consistently for the duration of the plan year.

Form 720
PCORI fees are required to be paid annually on IRS Form 720 by July 31 of each year. For plans ending in 2019, the next PCORI fee payment will be due July 31, 2020. 

Click here for the updated IRS Form 720.

Filed Under: Benefits Briefs