IRS releases updated PCORI fees for plan years ending after October 1, 2019

June 11, 2020

On June 8, 2020, the IRS issued Notice 2020-44 announcing the revised PCORI fee amount for plan years ending between October 1, 2019 and before October 1, 2020. For affected plans within this timeframe, the new “applicable dollar amount” used to calculate the PCORI fee is $2.54.

Notice 2020-44 states:

“The applicable dollar amount that must be used to calculate the fee imposed by Sections 4375 and 4376 for policy years and plan years that end on or after October 1, 2019, and before October 1, 2020, is $2.54.”

The notice also provides some transition relief for identifying the number of covered lives for policy/plan years ending on or after October 1, 2019.

Form 720

The IRS has not yet updated Form 720 or its instructions. On its PCORI website, the IRS notes that specific rules associated with the PCORI rate updates and filing requirements are currently being worked on and will be updated soon. It is not clear if the IRS will update Form 720 before the July 31 deadline or if it intends to provide a later due date for plans with plan years ending between October 1, 2019, and December 31, 2019.

All Employers should pay the tax for all employees covered in plans like The Difference Card.

Your insurance carrier is responsible for paying the tax on underlying plans that are fully insured. You will only be responsible for paying the tax ONCE per year based on your Difference Card covered lives.

The Difference Card will provide you with a report containing the total number of covered lives for your plan year. You will then complete IRS Form 720 Quarterly Federal Excise Tax Return.

*The Difference Card does not provide legal or tax advice and recommends that you discuss all related items with your company tax/finance advisor. 

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