PCORI Guide & 30-Second Checklist

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WHAT IS PCORI? PCORI stands for Patient-Centered Outcomes Rsearch Institute. The acronym is used as a short-hand name for the fee imposed by the Affordable Care Act on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans. The revenue generated by this fee helps fund the afore-mentioned Patient-Centered Outcomes Research Institute (PCORI).

PCORI MUST BE REPORTED ONCE A YEAR, but this annual reporting is done on the second quarter multi-purpose IRS FORM 720, Quarterly Federal Excise Tax Return.

THE FEE IS DUE BY JULY 31 and applies to policy/plan years ending on or after October 1, 2012, and before October 1, 2029. The size of the fee is based on the average number of lives covered under the applicable policy/plan year.

PCORI FEES FOR POLICY/PLAN YEARS ENDING IN 2023 equal the average number of covered lives multiplied by the applicable dollar amount shown below:

» Plan/policy years ending on or after January 1, 2023 thru September 30, 2023: $3.00
» Plan/policy years ending on or after October 1, 2023 thru December 31, 2023: $3.22
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PCORI 30-SECOND CHECKLIST

» PCORI fees apply to:
• Both fully-insured and self-funded health plans
• Carriers pay the fee for fully insured plans
• Retiree health plans
• HRAs

» PCORI fees do not apply to:
• Limited scope dental/vision plans
• Medicare, Medicaid,
• HSAs
• FSAs generally
• EAPs, wellness programs
• Ex-patriate plans

» Fees are due by July 31st following end of the policy/plan year.
» Fees are paid on the average number of covered lives under the plan.
» There are three options to calculate this number.

» Covered lives generally include:
• Active employees
• Former employees
• COBRA qualified beneficiaries
• State law continuees
• Covered spouses and dependents
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KEY POINTS FOR COMPLETING FORM 720
Download sample FORM 720 here highlighting lines/fields referenced below.

» The ‘Quarter Ending’ date on Page 1 should be June 30, 2024 for ALL employers, regardless of plan year.
» The PCORI fee is reported on Page 2, Line 133.
» Be sure to use the ‘applicable self-insured health plans’ line for all employers.
» Complete EITHER:
• Line 133(c) if plan year ended before October 1, 2023; OR
• Line 133(d) if plan year ended between October 1, 2023 and December 31, 2023.
» Whether you use Line 133(c) or 133(d), be sure to enter the average number of covered lives, the fee, and the tax (as indicated by the highlighted column headers).
» Sign and date where indicated on Page 3
» Payment voucher on Page 8 must be included if payment is being made via check or money order (do not include payment voucher if payment is being made via EFTPS https://www.eftps.gov/eftps/.
» Checks should be payable to ‘United States Treasury’.
» The employer’s EIN, ‘FORM 720,’ and ‘Q2 2024’ should be notated on the check.
» All filers must send the completed and signed FORM 720 postmarked on or before Wednesday, July 31 (with payment and payment voucher, where applicable) to:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0009
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DON’T FORGET THE HEALTH REIMBURSEMENT ARRANGEMENT [HRA]

Insured health plans but with a self-funded HRA, must file PCORI and remit payment on FORM 720 for the self-funded HRA. NOTE: In the case of an HRA offered with an insured health plan, employers need only pay the fee based on actual participants (not dependents) in the HRA. Self-funded health plans are not required to submit a separate HRA fee if the HRA has the same plan year as the self-funded plan.
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BENEFITSCAPE is the leading specialist in ACA reporting & compliance. If you have any question’s regarding your company’s PCORI filing and fee, or any other ACA topic, please do not hesitate to email info@benefitscape.com or to call +1 508-655-3307.

Thanks to Richard A. Szczebak of RAS Law, P.C. for contributions to this post.

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