Please let this serve as a reminder that the PCORI fee is due by July 31st and must be reported on Form 720. The fee will be used to partially fund the Patient-Centered Outcomes Research Institute which was implemented as part of the Patient Protection and Affordable Care Act.
Instructions are found here (see Part II):
The Form 720 itself is found here (see Part II):
Form 720, as well as the attached Form 720-V to submit payment, must be used to report and pay the requisite PCORI fee to the IRS. While Form 720 is used for other purposes to report excise taxes on a quarterly basis, for purposes of this PCORI fee, it is only used annually and is due by July 31st of each relevant year.
As previously advised, plan sponsors of applicable self-funded health plans are liable for this fee imposed by Code section 4376. The first fee was $1.00 per covered life for plan years ending on or after October 1, 2012 and before October 1, 2013. The second fee is $2.00 per covered life for plan years ending on or after October 1, 2013 and before October 1, 2014. The fee increases per year and concludes with plan years ending on or after October 1, 2018 and before October 1, 2019.
The fee is due no later than July 31 of the year following the last day of the plan year. Significantly, for plan years ending on or after January 1, 2013 and before October 1, 2013, this July 31st will be the first $1.00 PCORI payment made.
For plan years ending on or after October 1, 2013 through December 31, 2013 (i.e. 2013 calendar year plans and certain fiscal year plans), the associated $2.00 PCORI payment is due by this July 31st. For plan years ending on or after January 1, 2014 and before October 1, 2014, the $2.00 fee per covered life is instead due July 31, 2015.
There are specific calculation methods to be used to configure the number of covered lives and special rules may apply depending on the type of plan being reported. For example, HRAs and health FSAs that are not excepted from reporting only must count the covered participant and not the spouses and dependents. The Form 720 instructions do not outline all of these rules.
This email serves solely as a general summary of the PCORI fees. If you have questions regarding the application of this fee to your plans, contact Employee Benefits Attorney Elizabeth H. Latchana at 517.377.0826 or firstname.lastname@example.org.