Fees to fund the Patient-Centered Outcomes Research Institute (PCORI) are due to the IRS no later than July 31, 2020, from employers who sponsor certain self-insured health plans such as level-funded and health reimbursement arrangements (HRA) that are not treated as excepted benefits.
How to Pay PCORI Fees
Employers that sponsor certain self-insured health plans (level-funded) must report and pay the required PCORI fees via IRS Form 720 along with HRA plans, Quarterly Federal Excise Tax Return. Complete Part II, line 133. Employers should note “2nd Quarter” on the 720 form (click here for instructions for Form 720).
The fee applies to each plan year that ends after October 1, 2012, and before October 1, 2020. “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 your coverage period are generally a calendar year and end December 31.
|Plan Year Ending Date||Fee|
|October 1, 2018 to September 30, 2019||$2.45|
|October 1, 2019 to September 30, 2020||$2.54|
There are three 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 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.
Payments should be made payable to the U.S. Treasury and sent by July 31, 2020 to the address below:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0009
The following carrier products require filing on your part:
- Aetna Funding Advantage
- Humana Level Funded
- UnitedHealthcare All Savers
**Anthem OH SOCA MEWA, Anthem KY Chamber Advantage, Anthem IN Chamber Health Alliance, MMO COSE MEWA, and UHC MEWA have built the PCORI fees into the premiums, therefore, you will not need to file and pay any additional fees.
Your client relations advisor has the necessary information to assist you in completing IRS Form 720. Contact us with any questions or concerns.