Facing Expiration, PCORI Fees Instead Receive a 10-Year Extension
This post was authored by Shauna Waldin, Director of Compliance & Wellness at Rose and Kiernan, Inc.
The Further Consolidated Appropriations Act approved late last year which included provisions to permanently repeal several of the Affordable Care Act’s (ACA) taxes actually breathed new life into one ACA fee; PCORI.
The Patient-Centered Outcomes Research Institute (PCORI) was created by the ACA to help fund clinical effectiveness research, and was originally applied to policy and plan years ending after October 1, 2012 and before October 1, 2019. However, included in the same bill which repealed the Cadillac Tax, the medical devices excise tax and the health insurance providers fee, was a provision to reinstate PCORI fees through 2029. These fees are paid by various health insurers and employers sponsoring self-insured health plans, and is calculated as the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year.
The IRS had announced that the adjusted applicable amount is $2.45 for policy or plan years ending on or after Oct. 1, 2018, and before Oct. 1, 2019. The fee will continue to be adjusted annually, but new fee amounts have not yet been released.
PCORI fees are required to be paid annually on IRS Form 720 by July 31 of each year. The next PCORI fee payment will be due July 31, 2020.
The IRS provides information on calculating and paying PCORI Fees as well as a general FAQ about the program.
This overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
If you have any further questions, contact the Employee Benefits Management Group (EBMG) at Rose & Kiernan, Inc. here or by calling (800) 242-4433.