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Coverage Subject to PCORI Fees

Friday, March 18, 2016
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Highlights

PCORI FEES
  • The ACA imposes PCORI fees on health insurers and self-insured plan sponsors.
  • The fee applies to policy or plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019.
REPORTING & PAYING THE FEE

The IRS’ instructions for filing Form 720 include information on reporting and paying the PCORI fees.
The payment, paid through the Electronic Federal Tax Payment System (EFTPS), should be applied to the second quarter (in EFTPS, select “Q2” for the Quarter under Tax Period on the “Business Tax Payment” page).


The Affordable Care Act (ACA) imposes a fee on health insurance issuers and plan sponsors of self-insured health plans to help fund the Patient-Centered Outcomes Research Institute. The fee, called the Patient-Centered Outcomes Research Institute (PCORI) fee, is calculated based on the average number of lives covered under the policy or plan.

The fee applies to policy or plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019. The PCORI fee is filed using IRS Form 720, Quarterly Federal Excise Tax Return. Although Form 720 is a quarterly return, for PCORI fees, Form 720 must be filed annually only, by July 31 of each year.

This ACA Overview includes a chart issued by the Internal Revenue Service (IRS) on the application of the PCORI fee to common types of health coverage or arrangements. Please contact the Horton Group for more information on the PCORI fee.

Links and Resources

Please see the following IRS resources for more information on the ACA’s PCORI fees:

 

 

Type of Coverage or Arrangement
Subject to the Fee?
Person Responsible for Reporting & Paying the Fee
Accident and health coverage or major medical insurance coverage Yes
  • The issuer, if insured
  • The plan sponsor, if self-insured
Retiree-only health or major medical coverage Yes
  • The issuer, if insured
  • The plan sponsor, if self-insured
Health or major medical coverage under multiple policies or plans Yes
  • Each issuer or plan sponsor
  • See below for special rules for coverage under multiple applicable self-insured health plans
COBRA coverage Yes
  • The issuer, if insured
  • The plan sponsor, if self-insured
Health Reimbursement Arrangement (HRA), including a premium-only HRA Yes, unless the arrangement qualifies as an excepted benefit
  • The plan sponsor
  • See below for special rules for coverage under multiple applicable self-insured health plans and special counting rules for HRAs
Flexible Spending Arrangement (FSA) Yes, unless the arrangement qualifies as an excepted benefit
  • The plan sponsor
  • See below for special counting rules for FSAs
State and local government health or major medical plans for employees and/or retirees Yes
  • The issuer, if insured
  • The plan sponsor, if self-insured
Stand-alone dental or vision coverage No N/A
Group insurance policy designed and issued specifically to cover primarily employees working and residing outside the United States No N/A
Self-insured health plan designed specifically to cover primarily employees who are working and residing outside the United States No N/A
Medicare No N/A
Medicaid No N/A
Children’s Health Insurance Program (CHIP) No N/A
Military health plans No N/A
Certain Indian tribal government health plans (as defined in Section 4(d) of the Indian Health Care Improvement Act) No N/A
Health Savings Arrangements (HSAs) No N/A
Archer Medical Savings Accounts (MSAs) No N/A
Hospital indemnity or specified illness benefits No N/A
Stop-loss or indemnity reinsurance No N/A
Employee assistance programs (EAPs), disease management programs or wellness programs No, provided the program does not provide significant benefits in the nature of medical care or treatment N/A
Accident-only coverage (including accidental death and dismemberment) No N/A
Disability income coverage No N/A
Automobile medical payment coverage No N/A
Workers’ compensation or similar coverage No N/A
On-site medical clinic No N/A

 

 

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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