PCORI Fee Payments due by July 31, 2015
The Affordable Care Act (ACA) established the Patient Centered Outcomes Research Institute (PCORI) as a private, nonprofit corporation to advance comparative clinical effectiveness research and to make available the findings of this research to assist patients, clinicians and health care policy makers in making informed health decisions. Comparative effectiveness research focuses on clinical effectiveness and health outcomes. It does NOT focus on cost effectiveness.
In addition, the ACA added a new section to the Internal Revenue Code to establish the PCORI Trust Fund as the funding source for the PCORI and additional new sections to impose fees on group health plans to finance the PCORI Trust Fund:
Patient Centered Outcomes Research Institute (PCORI) Trust Fund Fees:
- This program began in 2012 and will run for seven years into 2019.
- The fee affects plans which have a plan year end date on, or after, October 1, 2012 and prior to October 1 2019.
- Group health plans subject to PCORI fees include fully insured and self-insured plans, Health Reimbursement Arrangements (HRA's), and some Flexible Spending Accounts (FSA's) which are not excepted benefits. Click here for detailed information.
Who Pays the Fee:
- Fully Insured Medical Plans - the fee is paid on the employer's behalf by the insurance carrier.
- Self Funded Medical Plans - the fee is paid by the employer.
- Health Reimbursement Arrangements (HRA's) - the fee is paid by the employer.
- Flexible Spending Accounts (FSA's) which are not excepted benefits - the fee is paid by the employer.
Fee Amounts are based on the Plan Year End Date:
- Ending October 1, 2013 - September 30, 2014, the fee is $2 per covered life
- Ending October 1, 2014 - September 30, 2015, the fee is $2.08 per covered life
- Ending October 1, 2015 - through September 30, 2019, fee is yet to be determined
- On or after October 1, 2019, the fee no longer applies
Remitting the PCORI Fee:
You will not be invoiced for the PCORI Fee. You are required to file federal excise tax return Form 720 along with related payment voucher Form 720-V. In addition, instructions are available on how to fill out the form and calculate the fee.
Payment is due annually by July 31 of the calendar year immediately following the last day of the plan year. So for plan years ending between January 1, 2014 and December 31, 2014, the form must be filed (and the fee paid) by July 31, 2015.
Third-party administrators are prohibited under the health reform law from remitting the fee on your behalf.