Individual Life And Health Insurance

PCORI Fees Due Aug. 1, 2022

The Affordable Care Act (ACA) requires health insurance issuers and self-insured plan sponsors to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). The fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return).

Overview of the PCORI Fees

The PCORI fees were scheduled to expire for plan years ending on or after Oct. 1, 2019. However, a federal spending bill enacted at the end of 2019 extended the PCORI fees for an additional 10 years. As a result, these fees will continue to apply for the 2020-2029 fiscal years.

Calculating the PCORI Fee Payment

In general, the PCORI fees are assessed, collected, and enforced like taxes. The PCORI fee applies separately to “specified health insurance policies” and “applicable self-insured health plans,” and is based on the average number of lives covered under the plan or policy.

Using Part II, Number 133 of Form 720, issuers and plan sponsors are required to report the average number of lives covered under the plan separately for specified health insurance policies and applicable self-insured health plans. That number is then multiplied by the applicable rate for that tax year ($2.66 for plan years ending on or after Oct. 1, 2020, and before Oct. 1, 2021, or $2.79 for plan years ending on or after Oct. 1, 2021, and before Oct. 1, 2022). The fees for specified health insurance policies and applicable self-insured health plans are then combined to equal the total tax owed.