The Patient-Centered Outcomes Research Institute (PCORI) fee is a crucial part of the Affordable Care Act (ACA), designed to fund medical research through the PCORI Institute. For employers and plan sponsors who had a self-insured medical plan ending any time during the 2023 calendar year, it is essential to report and pay the PCORI fee by July 31, 2024. At Benefits Compliance Consultants LLC, we offer comprehensive PCORI services to help you stay compliant. Here’s what you need to know about the PCORI fee and the upcoming deadline.
What is the PCORI Fee?
The PCORI fee was established to support the Patient-Centered Outcomes Research Institute, which funds vital medical research to improve healthcare outcomes. This fee is mandated by the ACA and applies to specific health plans, ensuring that research continues to advance the quality and effectiveness of care.
Who Needs to Pay the PCORI Fee?
If you are a plan sponsor of a self-insured medical plan, including health reimbursement arrangements (HRAs), you are responsible for paying the PCORI fee. However, sponsors of fully insured medical plans do not need to worry about this fee, as the insurer handles it. Special rules may apply to multiple self-insured arrangements maintained by the same sponsor within the same plan year, which are subject to a single fee.
Important Deadlines
The PCORI fee for plans ending in the 2023 calendar year must be paid by July 31, 2024. Missing this deadline can result in penalties and interest, making timely compliance essential.
Calculating the PCORI Fee
The fee amount is based on the average number of covered lives under your plan or policy. Covered lives include employees, retirees, enrolled spouses, dependents, and individuals with COBRA or other continuation coverage. Here’s how the fee is structured:
- For plan years ending January 1 through September 30, 2023, the fee is $3.00 per covered life.
- For plan years ending October 1 through December 31, 2023, the fee is $3.22 per covered life.
Plan sponsors can use one of three existing methods to determine the average number of covered lives:
- Actual Count Method
- Snapshot Method
- Form 5500 Method
If you changed your plan during 2023, such as moving to a self-insured plan or adding an HRA mid-year, you might need to pay the PCORI fee for that plan year. Additionally, changes in the plan year that result in two plan year endings within 2023 could require payments for both periods.
How to Pay the PCORI Fee
To pay the PCORI fee, you must use IRS Form 720, Quarterly Federal Excise Tax Return. Complete Part II, Number 133(c) and (d) of Form 720, ensuring you use the correct version and fee amounts. Plan sponsors not reporting other liabilities on Form 720 will need to file it once per year. In the form’s header, indicate the quarter ending as “June 30, 2024,” to show it’s for the second quarter.
Payments can be made electronically through the Electronic Federal Tax Payment System (EFTPS) or by mail. If paying by mail, ensure the Payment Voucher (720-V) specifies that the tax period is for the “2nd Quarter” to avoid late notices from the IRS.
Resources and Assistance
For detailed guidance, visit the IRS PCORI fee webpage. At Benefits Compliance Consultants LLC, we provide expert assistance with PCORI compliance. For any questions or to learn more about our services, contact us through our PCORI Compliance Service page.
Conclusion: Ensure Timely Compliance with PCORI Fees
Understanding and complying with the PCORI fee requirements is critical for plan sponsors of self-insured medical plans. With the deadline approaching for July 31, 2024, it’s essential to ensure timely payment to avoid penalties. Benefits Compliance Consultants LLC is here to assist you with all your compliance needs.
Take Action Now: Get Help with Your PCORI Compliance
If you have any questions or need assistance with your PCORI fee compliance, contact Benefits Compliance Consultants LLC today. Share this information with others who might benefit from it, and visit our PCORI Compliance Service page for more details.
