Health care reform requires health plans to pay a fee to support clinical research. The Patient-Centered Outcomes Research Institute Fee (PCORI fee) is due by July 31 of the calendar year following the end of the plan year. Insurers of insured plans and sponsors of self-funded plans must pay the PCORI fee and file appropriate returns with the payment. The fee is assessed for plan years ending on or after October 1, 2012 and before October 1, 2019.
The PCORI fee is reported on Form 720, Quarterly Federal Excise Tax Return. The fee can be paid electronically or mailed to the IRS with the filing.
The PCORI fee is based on the number of employees, spouses, and dependents covered by the plan. The fee was $1.00 per covered life for plan years ending before October 1, 2013, and increased to $2.00 per covered life for plan years between October 1, 2013 and October 1, 2019.
The insurance company will pay the fee for employers with insured plans. An employer with a self-funded plan will be responsible for completing the filing and paying the fee.
Most health plans are subject to the fee. An exception is made for stand-alone dental or vision plans, EAPs, wellness programs, plans for employees outside of the U.S., HSAs, and almost all HRAs and FSAs.
Employers with self-funded plans should prepare Form 720 and pay the PCORI fee due.
