Compliance Corner: PCORI Fees Due to IRS No Later Than July 31, 2023

Fees to fund the Patient-Centered Outcomes Research Institute (PCORI) are due from employers who sponsor certain self-insured health plans such as Level Funded and Health Reimbursement Arrangements (HRAs) that are not treated as excepted benefits. The filing is due to the IRS no later than July 31, 2023.

You don’t need to file anything if you have traditional fully insured coverage. In addition, the following level-funded and MEWAs have filed on behalf of their customers and fees are included in premiums:

Anthem SOCA MEWA (Ohio)
Anthem Chamber Advantage (Kentucky)
Anthem Indiana Chamber Health Alliance
MMO COSE MEWA
Ohio Farm Bureau MEWA
Humana Kentucky Chamber
UHC Ohio Chamber MEWA

How to Pay PCORI Fees

Employers that need to report and pay the required PCORI fees must complete the IRS Form 720 Quarterly Federal Excise Tax Return. Complete Part II, line 133. Employers should note “2nd Quarter” on the 720 form.

Click here to access the updated 720 form.

Click here to review instructions for Form 720.

The fee applies to each Plan year that ends after October 1, 2021, and before October 1, 2022. “Plan year” refers to the plan year for your Level Funded Medical Plans or an HRA plan. Generally the plan year and the coverage period are the same. As an example, if your HRA benefit resets each January 1, your HRA plan year and coverage period are generally a calendar year and end December 31.

Plan Year Ending Date	Fee
October 1, 2021 – September 30, 2022	$2.79
October 1, 2022 – September 30, 2023	$3.00

There are three available methods that can be used to determine the average number of lives covered under a plan for the policy year. For an HRA plan it is acceptable to use the number of subscribers only. The most commonly used method for determining the fee for your Level Funded plan is the “Snapshot Method”.

Actual Count Method: A plan sponsor may determine the average number of lives covered under a plan for a plan year by adding the totals of lives covered for each day of the play year and dividing that total by the total number of days in the plan year.
Snapshot Method: A plan sponsor may determine the average number of lives covered under an applicable self-insured health plan for a plan year based on the total number of lives covered on one date (or more dates if an equal number of dates is used in each quarter) during the first, second or third month of each quarter, and dividing that total by the number of dates on which a count was made.
Form 5500 Method: An eligible plan sponsor may determine the average number of lives covered under a plan for a plan year based on the number of participants reported on the Form 5500, Annual Return/Report of Employee Benefit Plan, or the Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan.

Payments should be made payable to the U.S. Treasury and sent by July 31, 2023, to the address below:

Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0009

The following documents accompany this notice:

The Form 720
Instructions for the Form 720
Patient-Centered Outreach Research Institute Filing Due Dates and Applicable Rates Flier

Tools to Assist you by Carrier

All Savers®

All Savers posts the employer group’s membership information to the employer website. The employer group is required to complete and file the IRS Form 720. For general questions please contact All Savers Broker Services at 1-866-405-7174.

Humana Level Funded

Humana provides a snapshot report that shows the monthly membership employers will need when filing the PCORI. It is an employer report (instructions below). As a broker, the employer may grant you access if they want you to pull it for them.

Click here to review the instructions.

Aetna Funding Advantage

This link takes you to the Aetna Funding Advantage PCORI Fee Estimator Tool. This tool gives you guidance on calculating the PCORI fees for this group.

Other Administrators

If you have a Third Party Administrator (TPA), they will often provide member headcounts needed to calculate your average covered number of members and the PCORI Fee.

If you have other questions or need assistance, please contact your ARC Client Advisor for help.