The annual PCORI fee must be reported and paid to the IRS by the following plan sponsors:
- Self-insured health plans
- Certain health reimbursement arrangements, or HRAs
- Certain flexible spending accounts, or FSAs (though the fee does not apply to most FSAs)
Please click on the following documents for more information:
- Client Alert–PCORI Fee Reporting on Form 720–June 12, 2014
- IRS Form 720–Quarterly Federal Excise Tax Return Rev April 2014
- IRS Form 720 INSTRUCTIONS–Quarterly Federal Excise Tax Return Rev April 2014
Background on the PCORI Fee
The Affordable Care Act established the Patient Centered Outcomes Research Institute. Health insurance issuers and plan sponsors of self-insured health plans are required to pay an excise tax to fund it often referred to as the “PCORI fee.” The fee must be paid annually for seven years, by July 31 of each year it is due. The first fee is $1 per every person the health plan covers including employees, dependents, COBRA participants, and covered retirees (covered lives). The second fee is $2 per covered life.
Certain health reimbursement arrangements (HRAs) and medical flexible spending accounts (FSAs) must also pay the fee (though most FSAs are exempt). However, the fee for these plans is $1 or $2 per participant (employee).
Insurers will report and pay the fee on behalf of fully insured plans. Plan sponsors of self-insured plans must report and pay the fee directly to the government.
Feel free to contact your account manager with questions at 866-306-0200 or Robin Norgaard, client communication specialist, at firstname.lastname@example.org.