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PCORI Fees have been extended to September 30, 2029

April 28, 2020

The signing of the Further Consolidated Appropriations Act at the close of 2019 provides an extension of the Affordable Care Act’s (ACA) Patient-Centered Outcomes Research Institute (PCORI) fees through September 20, 2029.

The ACA imposes a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the PCORI. The fee, required to be reported only once a year on the second quarter Form 720 and paid by its due date, July 31, is based on the average number of lives covered under the policy or plan.

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.

For policy and plan years ending from January 1, 2019 – September 30, 2019, the tax is equal to $2.45 times the number of covered employees. For example, if your plan year ended on September 30, 2019 and you have 148 covered lives with The Difference Card, your tax due would be $362.60. (148 x $2.45/per life = $362.20)

The IRS has not updated it’s website with the fee rate for plans ended October – December 2019. Visit the IRS Newsroom for PCORI for more information.

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. Click here for Form 720.

According to the IRS, you should, “File the second quarter Form 720 annually to report and pay the fee no later than July 31 of the calendar year immediately following the last day of the policy year or plan year to which the fee applies. Issuers and plan sponsors who are required to pay the fee but are not required to report any other liabilities on a Form 720 will be required to file a Form 720 only once a year.” For more instructions from the IRS on filing, see here.

For a flyer from The Difference Card about the PCORI Fee, click here.

*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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