Please let this serve as a reminder that the Patient-Centered Outcomes Research Institute (PCORI) fee is due by July 31st and must be reported on Form 720. The fee will be used to partially fund the PCORI 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. For plan years ending on or after October 1, 2013 and before October 1, 2014, the fee is $2.00 per covered life. For plan years ending on or after October 1, 2014 and before October 1, 2015, the fee is $2.08 per covered life. The fee increases per year and concludes with plan years ending on or after October 1, 2018 and before October 1, 2019. [For calendar year plans, the fee runs from 2012 through 2018 plan years.]
The fee is due no later than July 31 of the year following the last day of the plan year.
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 correspondence is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.