Reminder: PCORI Fees are Due by July 31, 2021

June 24, 2021

Key Takeaways A Quick Summary

Key Takeaways

PCORI fees are paid annually and are due on July 31; the requirement applies to plan years ending on or before September 30, 2029 (PCORI fees were extended through 2029).
The PCORI fee for sponsors of self-insured health plans is based on the average number of covered lives, including dependents, spouses, retirees and COBRA beneficiaries.
Employers must report and pay PCORI fees using IRS Form 720 (Rev. June 2021) and should remit payment via the Electronic Federal Tax Payment System (EFTPS); fees are due July 31 of the year following the plan/policy year end.
Difference Card Employer Groups are responsible for paying the fee for employees covered under self-funded plans like The Difference Card; the insurance carrier pays for fully insured underlying plans; Difference Card Account Managers can provide a covered-lives report to assist filing.
Fee amounts: $2.54 per covered life for plan years ending on/after Oct 1, 2019 and before Oct 1, 2020, and $2.66 per covered life for plan years ending on/after Oct 1, 2020 and before Oct 1, 2021; PCORI was established by the ACA and extended by the Further Consolidated Appropriations Act of 2020—Difference Card does not provide legal or tax advice and recommends consulting a finance advisor.

Don't forget to file by the July 31st deadline

What are PCORI Fees?

Under the Affordable Care Act (ACA), most employer sponsors and insurers are required to pay PCORI fees until 2029, as it applies to plan years ending on or before September 30, 2029.

The PCORI fee imposed on sponsors of a self-insured health plan is based on the average number of lives covered under the plan. That means plan sponsors must account for all parties enrolled in their respective plan- including dependents, spouses, retirees, and COBRA beneficiaries.

The PCORI fee is paid annually and is due on July 31st. Fees are due on July 31 of the year following the last day of policy or plan year.

Employers that sponsor self-insured group health plans must report and pay PCORI fees using the newly released (Rev. June 2021) IRS Form 720, Quarterly Federal Excise Tax Return. The IRS states that the fee should be paid using the Electronic Federal Tax Payment Systems (EFTPS).

PCORI stands for Patient-Centered Outcomes Research Institute and is federally funded organization that was established through the 2010 Patient Protection and Affordable Care Act.

PCORI fees were originally slated to end in 2020, but under the Further Consolidated Appropriations Act of 2020, signed into law on December 20, 2019, PRCORI fees were extended for 10 years. As a result of this extension, the Patient-Centered Outcomes Research Trust Fund fee will continue to be imposed through 2029.

What does this mean for Difference Card Employer Groups?

Difference Card Employer Groups should pay the tax for all employees covered in self-funded 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 plan years ending on or after October 1, 2019 and before October 1, 2020, the tax is equal to $2.54 times the number of covered employees.

For plan years ending on or after October 1, 2020 and before October 1, 2021, the tax is equal to $2.66 times the number of covered employees.

If you have any questions about your Difference Card covered lives, please contact your Difference Card Account Manager. Your Difference Card Account Manager can provide a report detailing covered lives your Difference Card Plan to assist in your filing.

Please note, the PCORI tax is a part of the excise tax provisions of the Internal Revenue Code. The Difference Card does not provide legal or tax advice and recommends that you discuss all related items with your company finance advisor.