PCORI Fees for Self-Insured Plans - DSP Insurance Services

Under the Patient Protection and Affordable Care Act (PPACA) a new fee was introduced. The Patient-Centered Outcomes Research Institute (PCORI) fees for self-insured plans are a mandatory charge due by July 31st of the year following the last day of the policy year. It’s reported on IRS Form 720.

PCORI fees were originally scheduled to sunset on September 30, 2019. In December 2019, the Further Consolidated Appropriations Act of 2020 extended the PCORI fees for another 10 years. It continues to apply to all plan years ending on or before September 30, 2029.

Who Pays the PCORI Fees?

• PCORI fees self-insured plans, including most “level-funded” plans, and most Health Reimbursement Arrangements (HRAs), must pay PCORI fees. Insurers of specific health insurance plans are also responsible.

How Are PCORI Fees Used? The more than $4.5 billion collected as of April 2024 have been used to fund the Patient Centered Outcome Research Institute, which in turn funds medical research, predominantly, Comparative Clinical Effectiveness Research (CER). You can find out more about PCORI’s research here: https://www.pcori.org/research-related-projects/about-our-research

Fee Rates and Payment

• For policy years ending on or after October 1, 2023, and before October 1, 2024, the fee is $3.22 per average number of covered lives (think belly buttons, not employees).
• For policy years ending on or after October 1, 2022 and before October 1, 2023, the fee is $3.00 per average number of covered lives (think belly buttons, not employees).
• If you are among the majority of employers with self-funded plans, you’ll be completing “Part II”, “Line 133”, Row “(d)”, Columns ”(a)”, “(c)” and “Tax” (among the basics of company information and signatures).

Form 720 and PCORI Fees

• The IRS maintains a website dedicated to PCORI: https://www.irs.gov/newsroom/patient-centered-outcomes-research-institute-fee
• The IRS updated Form 720, this week to accurately reflect current reporting rates.
• Sponsors of self-insured plans must file Form 720 annually by July 31st of the year following the last day of the policy year.

Don’t forget to remit your filings prior to July 31, 2024, to avoid penalties!

P.S. How do you feel about the recent increases?