What are PCORI Fees?
PCORI fees, or Patient-Centered Outcomes Research Institute fees, represent a type of levy imposed on specific health insurance plans and self-insured health plans as mandated by the Affordable Care Act (ACA) in the United States. These fees are earmarked to fund research endeavors to improve patient outcomes, enhance healthcare decision-making, and advance healthcare services’ overall quality and efficiency.
Here are key details about PCORI fees:
1. Purpose:
- PCORI fees support the Patient-Centered Outcomes Research Institute, an independent, nonprofit organization established by the ACA. The institute conducts research to provide evidence-based information about the effectiveness of different medical treatments, procedures, and strategies.
2. Applicable Plans:
- PCORI fees apply to specified health insurance policies and self-insured health plans. These include fully insured health plans, employer-sponsored self-insured health plans, and certain health reimbursement arrangements (HRAs).
3. Calculation:
- The amount of PCORI fees is calculated based on the average number of covered lives under the applicable health plan. Covered lives include employees, dependents, and other individuals covered by the health plan.
4. Fee Amount and Adjustments:
- The PCORI fee amount is determined annually by the Internal Revenue Service (IRS). The fee may be subject to adjustments based on inflation and other factors.
5. Reporting and Payment:
- Employers subject to PCORI fees are typically responsible for reporting and paying these fees annually. The reporting process is typically done using IRS Form 720, which is the Quarterly Federal Excise Tax Return.
6. Filing Deadline:
- The deadline for filing IRS Form 720 and paying PCORI fees is July 31 of each year. However, the deadline can be affected by weekends or holidays.
7. Exemptions:
- Some health plans are exempt from PCORI fees. Exempt plans include certain government plans, certain plans for certain Indian tribal governments, and plans that primarily provide excepted benefits.
8. Duration:
- Originally set to expire, PCORI fees were reinstated and extended through the Further Consolidated Appropriations Act of 2020. The fees apply to plan years ending on or after October 1, 2012, and before October 1, 2029.
9. Research Findings:
- The research funded by PCORI aims to provide valuable insights into healthcare practices, enabling healthcare providers and decision-makers to make informed choices about treatment options.
10. Employer Considerations:
- Employers offering applicable health plans must be aware of PCORI fees, ensure accurate calculation and reporting, and meet the filing deadlines to comply with ACA requirements.
Conclusion
PCORI fees apply to designated health insurance policies and self-insured health plans, including employer-sponsored plans and certain health reimbursement arrangements (HRAs). Calculated based on the average number of covered lives, employers report and pay these fees annually, subject to ACA regulations. The funds collected contribute to research conducted by the Patient-Centered Outcomes Research Institute, offering valuable insights for informed healthcare choices. With an established deadline for reporting and payment, employers must navigate the complexities of fees to comply with ACA requirements and support ongoing research efforts.