Compliance Corner: PCORI Fees Due to IRS No Later Than July 31, 2024

Fees to fund the Patient-Centered Outcomes Research Institute (PCORI) are due from employers who sponsor self-insured health plans such as level-funded plans and Health Reimbursement Arrangements (HRAs). The filing is due to the IRS no later than July 31, 2024.

You don’t need to file anything if you have traditional fully insured coverage. In addition, the following MEWAs have filed on behalf of their customers and fees are included in their 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 that applies is based on when your plan year ended. “Plan year” refers to the date your group began coverage in a self-funded plan, level-funded plan, and/or HRA. Typically, the plan year ends 12 months after that. For example, if your HRA benefit resets each January 1, your HRA plan year and coverage period generally end December 31. If your plan renewed June 1, 2023, then the plan year ended on May 31, 2024.

Calculating the PCORI Fee Payment

The PCORI fee is based on the average number of lives covered under the plan. Using Part II, Number 133 of Form 720, issuers and plan sponsors report the average number of lives— employees and their dependents—covered under the plan separately for their self-insured health plan and/or HRA. That number is then multiplied by the applicable rate described in the table below.

Plan Year Ending Date	Fee
Before October 1, 2023	$3.00
After October 1, 2023, but before October 1, 2024	$3.22

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 employees only. The most commonly used method for determining the fee for a self-funded or 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 plan 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.
*Note: the 5500 is only required for groups with 100 or more plan participants.

Helpful Resources

Form 720
Instructions for the Form 720
PCORI: Step-By-Step Guide (available upon request)

Tools to Assist you by Carrier

All Savers/UnitedHealthcare Level Funded

All Savers Alternate Funding groups that had a plan year ending in 2023 will receive a PCORI Fee Membership Report mailed the week of June 10. The reports can be accessed on the myallsaversconnect.com employer website and the myallsavers.com broker website.

UnitedHealthcare Level Funded groups with a plan year ending in 2023 can find their PCORI Fee Membership Reports on uhceservices.com employer and broker website the first week of July.

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 your 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.