Congress has recently extended the Patient Centered Outcomes Research Institute (PCORI) fees under IRC sections 4375 and 4376 for another 10 years as a result of the Further Consolidated Appropriations Act of 2020. This requirement was set to expire so most employers would not have to file a Form 720 after 2019. This means that fully insured and self-insured health plans must continue to pay these fees through 2029.
The PCORI fee is calculated based on the average number of lives covered during the policy year. This means all parties enrolled will need to be accounted for such as dependents, spouses, retirees, and COBRA beneficiaries.
Employers with self-insured plans are subject to the fees and must report and pay on Form 720. In addition to self-insured medical plans, health FSA and HRA arrangements that fail to qualify as “excepted benefits” would also be subject to the fee. Employers that sponsor a self-insured HRA along with a fully insured medical plan must pay fees based on the number of employees participating in the HRA, this count would not include dependents. Fully insured medical plans already have the fees built into the rates. PCORI fees apply for policy and plan years ending in 2019 are due on July 31st 2020. The current fee is $2.45 per individual for policy and plan years ending after 10/1/19. The fee is subject to change once the IRS releases new information.
Contact your Cornerstone representative with any questions.