The ACA requires employers with self-funded health plans and health insurance issuers to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). 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 and generally cover plan years that end during the preceding calendar year. For plan years ending in 2022, the PCORI fees are due by July 31, 2023.
In general, the PCORI fees are assessed, collected and enforced similarly to taxes. The PCORI fee amount is based on the average number of individuals covered under the plan.
Final rules from the IRS require employers with self-funded health plans to use one of three alternative methods to determine the average number of individuals covered under the plan for a plan year: the actual count method, the snapshot method, or the Form 5500 method. That number is then multiplied by the applicable rate for that tax year ($2.79 for plan years ending on or after Oct. 1, 2021, and before Oct. 1, 2022, or $3.00 for plan years ending on or after Oct. 1, 2022, and before Oct. 1, 2023).
The IRS provides helpful resources regarding PCORI fees, including a chart on how the fees apply to specific types of health coverage or arrangements.
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