The Patient-Centered Outcomes Research Institute (PCORI) fee that employers thought was dead as of last September is back, thanks to legislation passed in December 2019 that extended it for an additional 10 years.
The Bipartisan Budget Act of 2019 reinstated the PCORI annual filing and fees for another decade, through 2029. This means that self-funded plan sponsors’ and insurers’ PCORI filings and fees for plan years ending in 2019 are due on July 31, 2020.
PCORI filings must be made via IRS Form 720; fees vary depending on when in 2019 the plan year ended. The fee is $2.45 per covered life for plan years ending between January 1 and September 30, 2019, and is $2.54 per covered life for plan years ending between October 1, 2019, and September 30, 2020. Note that “covered life” includes all dependents covered under an insured plan, not just employees.
Employers that sponsor a self-insured health reimbursement arrangement (HRA) with a fully insured medical plan pay PCORI fees based on the number of employees (no dependents) participating in the HRA. The insurer pays the PCORI fee on employees (including dependents) covered under the insured plan.
If an employer sponsors an HRA with a self-funded medical plan and both have the same plan year, a single PCORI fee is paid by the employer based on the covered lives in the self-funded medical plan and the HRA is disregarded.
The IRS provides a helpful chart to help identify which plans require PCORI filings and fee payment.
At Hall Benefits Law, we work extensively with employers to adhere to applicable reporting requirements and avoid costly penalties that can result in substantial harm to your business. Please call 678-439-6236 to discuss your concerns with an experienced ERISA attorney.
Hall Benefits Law, LLC
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