The Internal Revenue Service (IRS) announced the indexed dollar amount for the Patient Centered Outcomes Research Institute (PCORI) fee. For plan years that end on or after October 1, 2024 and before October 1, 2025, the fee is $3.47 per covered life. Issuers of specific health insurance policies and plan sponsors of applicable self-insured health plans are required to pay the PCORI fee.
Self-Insured Plans Subject to the Fee
The PCORI fee applies to self-insured plans providing accident and health coverage, including retiree-only plans. State and local governments sponsoring self-insured plans are also subject to the fee. The PCORI fee does not apply to self-insured plans that provide: 1) only excepted benefits (e.g., limited scope dental); 2) expatriate plans; 3) employee assistance programs; 4) disease specific management programs; or 5)wellness programs that do not provide significant medical treatment benefits.
PCORI fees may also apply to health reimbursement arrangements (HRAs) and health flexible spending accounts (health FSAs) that are considered self-insured health plans; however, these plans are subject to special rules. Archer Medical Savings Accounts and Health Savings Accounts (HSAs) are exempt from the fee.
Calculating and Paying the PCORI Fee Amount
Sponsors of self-insured plans must make annual PCORI payments by July 31 of the calendar year immediately following the last day of the applicable plan year. The PCORI fee is based on the average number of covered lives during the plan year.
Plan sponsors and insurers use IRS Form 720 for the second quarter to report the amount of their PCORI fee. Payments may be made through the IRS Electronic Federal Tax Payment System (EFTPS). For the most recent versions of Form 720 and associated instructions, please see the IRS Form 720 site.