The IRS has released Notice 2023-70, announcing a rise in the Patient-Centered Outcomes Research Institute (PCORI) fee for plan years concluding between October 1, 2023, and October 1, 2024. The revised PCORI fee stands at $3.22 per covered life under the plan.
For plan years that ended on or after October 1, 2022, and before October 1, 2023, the PCORI fee amount is $3.00 multiplied by the average number of lives covered under the plan.
Applicability of PCORI Fee
The PCORI fee was created by the Affordable Care Act (ACA) and first applied for plan or policy years ending on or after October 1, 2012. The fee is imposed on health insurance issuers and self-insured plan sponsors to fund comparative effectiveness research. The PCORI fee was originally scheduled to expire in 2019. However, a federal spending bill extended the PCORI fee for an additional 10 years. As a result, the PCORI fee will apply through the plan or policy year ending before October 1, 2029.
Payment Deadline
PCORI fees are reported and paid annually on IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due each year by July 31 of the year following the last day of the plan year. For plan years ending in 2023, the PCORI fee is due by July 31, 2024. Employers with self-insured health plans should have reported and paid PCORI fees for 2022 by July 31, 2023.
Calculating the PCORI Fee
The PCORI fees are calculated based on the average number of covered lives under the plan or policy. This generally includes employees and their enrolled spouses and dependents, unless the plan is an HRA or FSA. Final rules outline a number of alternatives for issuers and plan sponsors to determine the average number of covered lives.
IRS Resources
The IRS provides the following resources on PCORI Fees:
- PCORI Fee Overview Page
- PCORI Fee: Questions and Answers
- PCORI Fee Due Dates and Applicable Rates
- Chart: Application of the PCORI Fee to Common Types of Health Coverage or Arrangements
Recap
- Covered Plans: The PCORI fees generally apply to insurance policies providing accident and health coverage and self-insured group health plans.
- Applicability Dates: The PCORI fee applies to plan or policy years ending on or after October 1, 2012, and before October 1, 2029.
- Payment Deadline: PCORI fees are due for plan or policy years ending in 2023 on July 31, 2024.
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.
