IRS Announces Fee Hike for Health Insurance Plans in 2023

6/21/2023
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The Internal Revenue Service (IRS) is raising the Patient-Centered Outcomes Research Institute (PCORI) fees for health insurance issuers and self-insured health plan sponsors. The adjusted annual fee, due by July 31, 2023, is set at $3 per person, increasing from the previous fee of $2.79.

 

This fee supports the PCORI, a Washington-based institution that evaluates the effectiveness of medical treatments. Introduced under the Affordable Care Act, the PCORI fee was scheduled to conclude in 2019. However, the Bipartisan Budget Act of 2019 extended it for another decade until 2029.

 

For plan years ending on or after October 1, 2022, and before October 1, 2023, the fee is $3 per person. For plan years ending on or after October 1, 2021, and before October 1, 2022, the fee is $2.79 per person.

 

The PCORI fee calculation involves the average number of individuals covered under the plan, inclusive of dependents, retirees, and COBRA participants. The payment process differs between self-insured employers, who pay directly to the IRS, and fully insured employers, for whom insurance providers pay the fee, often factoring the cost into premium increases.

 

The IRS provides multiple methods to calculate the average number of covered lives, and the fees are reported and paid annually via the IRS Form 720.

For more details on on this topic, check out the news article from the Society for Human Resource Management. 

Source: IRS, SHRM