Compliance
PCORI Fees Due July 31, 2024
June 7, 2024
The Affordable Care Act (ACA) requires self-funded plan sponsors and health insurance issuers to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). This is also sometimes referred to as the Comparative Effectiveness Research Fees, or CERF. The fees are reported and paid annually using IRS Form 720, the Quarterly Federal Excise Tax Return.
Form 720 and full payment of the PCORI fees are due by July 31 of each year for the plan year that ended in the prior calendar year. Therefore, the deadline for filing Form 720 is July 31, 2024, for all plan years that ended in 2023.
Calculating the PCORI Fee Payment
The fee is based on the average number of lives covered by the plan multiplied by the applicable fee.
- For plan years that ended up to, and including, 9/30/23, the fee is $3.00 multiplied by the average number of covered lives.
- For plan years that ended between 10/1/23 and 12/31/23, the fee is $3.22 multiplied by the average number of covered lives.
Self-funded plan sponsors and health insurance issuers are to calculate the average number of covered lives using one of the following permissible methods:
- Actual count method
- Snapshot method
- Form 5500 method (applicable only to self-funded plan sponsors)
- Member months method (applicable only to health insurance issuers)
- State form method (applicable only to health insurance issuers)
More Information
The IRS provides helpful resources, including a chart on how the fees apply to specific types of health coverage or arrangements.
If you have questions about how to calculate the average number of covered lives, which plans need to be reported, or any other questions regarding PCORI fees, please contact your Hylant representative.
The above information does not constitute advice. Always contact your employee benefits broker or trusted advisor for insurance-related questions.
