1. What is the PCORI Fee?:
- The PCORI fee is imposed by the Affordable Care Act (ACA) on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans.
- Its purpose is to help fund the Patient-Centered Outcomes Research Institute (PCORI) that conducts research to improve patient care and outcomes.
2. Who Pays the Fee?:
- The fee applies to:
- Fully Insured Medical plans
- Carrier is responsible for paying fee
- Level – Funded Medical Plans
- Plan sponsor is responsible for paying fee
- Self-Insured Medical Plans
- Plan sponsor is responsible for paying fee
- COBRA Coverage
- Fully Insured – Carrier is responsible for paying fee
- Self/Level funding – Plan sponsor is responsible for paying fee
- HRA coverage (unless it is an excepted benefit)
- Plan sponsor is responsible for paying fee
- FSA coverage (unless it is an excepted benefit)
- Plan sponsor is responsible for paying fee
- Fully Insured Medical plans
3. Calculation and Reporting:
- The fee is based on the average number of lives covered under the policy or plan.
- It’s reported annually on the second quarter Form 720, the Quarterly Federal Excise Tax Return. (see instructions below)
- The payment is due by July 31 each year.
- The fee applies to policy or plan years ending on or after October 1, 2012, and before October 1, 2029.
4. Fee Amount for 2024:
- For plan and policy years ending on or after October 1, 2023, and before October 1, 2024, the PCORI fee is $3.22 per covered life.
PCORI Fee: Questions and Answers
If you need assistance with PCORI reporting, click here.
IRS Form 720 Instructions
Patient-centered outcomes research (PCOR) fee (IRS No. 133). The PCOR fee is imposed on issuers of specified health insurance policies (section 4375) and plan sponsors of applicable self-insured health plans (section 4376) for policy and plan years ending on or after October 1, 2012. Generally, references to taxes on Form 720 include this fee. Specified health insurance policies. For issuers of specified health insurance policies, the fee for a policy year ending on or after October 1, 2022, but before October 1, 2023, is $3.00 (line 133(b)) ($2.79 for a policy year ending on or after October 1, 2021, but before October 1, 2022 (line 133(a)), multiplied by the average number of lives covered under the policy for that policy year. Generally, issuers of specified health insurance policies must use one of the following four alternative methods to determine the average number of lives covered under a policy for the policy year. 1. The actual count method. 2. The snapshot method. 3. The member months method. 4. The state form method. Applicable self-insured health plans. For plan sponsors of applicable self-insured health plans, the fee for a plan year ending on or after October 1, 2022, but before October 1, 2023, is $3.00 (line 133(d)) ($2.79 for a policy year ending on or after October 1, 2021, but before October 1, 2022 (line 133(c)), multiplied by the average number of lives covered under the plan for that plan year. Generally, plan sponsors of applicable self-insured health plans must use one of the following three alternative methods to determine the average number of lives covered under a plan for the plan year. 1. Actual count method. 2. Snapshot method. 3. Form 5500 method. Reporting and paying the fee. File Form 720 annually to report and pay the fee on the second quarter Form 720 no later than July 31 of the calendar year immediately following the last day of the policy year or plan year to which the fee applies. Because the rate used to determine the fee varies from year to year, you should determine the fee using the instructions for the second quarter Form 720. If you file Form 720 only to report the fee, don't file Form 720 for the first, third, or fourth quarter of the year. If you file Form 720 to report quarterly excise tax liability for the first, third, or fourth quarter of the year (for example, filers reporting the foreign insurance tax (IRS No. 30), don't make an entry on the line for IRS No. 133 on those filings). Deposits aren't required for this fee, so issuers and plan sponsors aren't required to pay the fee using EFTPS. However, if the fee is paid using EFTPS, the payment should be applied to the second quarter. See Electronic deposit requirement under Payment of Taxes, later. Report the average number of lives covered in column (a). Apply the applicable rate ((b) Rate for avg. covered life) and enter the fee in column (c). Combine the fees for specified health insurance policies and applicable self-insured health plans and enter the total in the tax column on the line for IRS No. 133.