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May 31, 2017

PCORI Fee due July 31st

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As a reminder, the deadline for the PCORI Fee (Patient-Centered Outcomes Research Institute) is July 31stEmployers who sponsor certain self-insured health plans must submit IRS Form 720 (Quarterly Federal Excise Tax Return) with payment to the IRS, while insurers are responsible for fully-insured health plans.

The amount due is based on the health plan’s plan year and the average number of lives covered (enrollment) for the prior plan year.  Generally, the fee is due July 31st of the calendar year following the end of the plan year.  The fee per covered life (for plan years ending in 2016) is stated below:

  • $2.26 for plans with plan years beginning January 1, November 1 and December 1
  • $2.17 for plans with plan years beginning February 1, March 1, April 1, May 1, June 1, July 1, August 1, September 1, and October 1

View IRS Form 720
View Summary on PCORI Fee
View Summary on PCORI Fee FAQs
View Summary on Health Plans Subject to the PCORI Fee to determine what headcount information to use
View Summary on Reporting and Payment
View Summary of Rules for HRA’s (Health Reimbursement Account)
 
WHAT THIS MEANS TO EMPLOYERS:  If you offer a self-insured health plan and are unfamiliar with the rules and process, be sure to review the above Summary on Health Plans Subject to the PCORI Fee to determine applicability to your plans.  Your TPA should provide you with enrollment information for your plan year ending in 2016 to calculate covered lives using one of the IRS’ Counting Methods and to complete Form 720.  To determine the amount you owe the IRS, multiply the appropriate fee by covered lives.  Be sure to get the form and payment to the IRS by July 31st.

This fee is an excise tax and should not be included in your calculation of fully-insured equivalent rates for purposes of setting employee contributions for self-insured plans.  However, an employer may deduct the payment as an ordinary and necessary business expense.