PCORI Fees: IRS Form 720 Update

The Affordable Care Act imposes fees on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the Patient-Centered Outcomes Research Institute (PCORI). PCORI is responsible for conducting research to evaluate and compare the health outcomes and clinical effectiveness, risks, and benefits of medical treatments, services, procedures, and drugs.

Plan sponsors must pay the PCORI fee by July 31 of the calendar year immediately following the last day of that plan year. All plan sponsors of self-insured group health plans will pay the fee in 2014, but the amount of the fee varies depending on the plan year.

  • Calendar year plan beginning January 1, 2013 will pay $2 per covered life.
  • Plan years beginning from October 2, 2012 – December 31, 2012 will pay $2 per covered life.
  • Plan years beginning January 2,2012 – October 1, 2012 will pay $1 per covered life.

PCORI fees are reported annually on the 2nd quarter Form 720 and paid by its due date, July 31st. The fees are based on the average number of lives covered under the policy or plan. They apply to policy or plan years ending on or after October 1, 2012, and before October 1, 2019. The PCORI fee will not be assessed for plan years ending after September 30, 2019, which means that for a calendar year plan, the last year for assessment is the 2018 calendar year.

The types of plans that must pay the PCORI Fees by July 31, 2014 include the following:

  • Health/accident plans
  • HRAs with a plan year that began 1/1/2013 that are not an excepted benefit (Employer contribution is greater than $500)
  • Health FSAs with a plan year that began 1/1/2013 that are not aIRn excepted benefit (Plan has employer contributions with the maximum reimbursement greater than two times an employee’s salary reduction election or employer contribution is greater than $500)
  • Retiree plans

Please click on the links below to access Form 720 and Form 720 instructions.

Form 720
Form 720 instructions