Applicable Dollar Amount Used to Determine PCORI Fee Adjusted to $2.26

The Internal Revenue Service (IRS) recently issued guidance that increases the applicable dollar amount used to determine the Patient-Centered Outcomes Research Institute (PCORI) fee, for plan years that end on or after October 1, 2016 and before October 1, 2017.

Background

PCORI fees are imposed on plan sponsors of applicable self-insured health plans for each plan year ending on or after October 1, 2012 and before October 1, 2019. The fees support research to evaluate and compare health outcomes and the clinical effectiveness of certain medical treatments, services, procedures, and drugs.

For plan years ending on or after October 1, 2015 and before October 1, 2016, the fee for an employer sponsoring an applicable self-insured plan was $2.17 multiplied by the average number of lives covered under the plan. Details on how to determine the average number of lives covered under a plan, as well as various examples, are included in final regulations.

Fee Increase
Pursuant to IRS Notice 2016-64, for plan years ending on or after October 1, 2016 and before October 1, 2017, the fee is $2.26 (multiplied by the average number of lives covered under the plan).

For plan years ending on or after October 1, 2017 and before October 1, 2019, the fee will be further adjusted to reflect inflation.

Be sure to check out our PCORI Fees for Self-Insured Plans section for more information.

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Applicable Dollar Amount for Calculating PCORI Fee Adjusted for Inflation

The IRS has issued guidance which increases the applicable dollar amount used to determine the Patient-Centered Outcomes Research Institute (PCORI) fee. For plan years ending on or after October 1, 2015 and before October 1, 2016, the fee is $2.17 (multiplied by the average number of lives covered under the plan).

Background
PCORI fees are imposed on plan sponsors of applicable self-insured health plans for each plan year ending on or after October 1, 2012 and before October 1, 2019. The fees support research to evaluate and compare health outcomes and the clinical effectiveness of certain medical treatments, services, procedures, and drugs.

For plan years ending on or after October 1, 2014 and before October 1, 2015, the fee for an employer sponsoring an applicable self-insured plan is $2.08 multiplied by the average number of lives covered under the plan. Details on how to determine the average number of lives covered under a plan, as well as various examples, are included in final regulations.

Fee Increase
Pursuant to IRS Notice 2015-60, for plan years ending on or after October 1, 2015 and before October 1, 2016, the fee is $2.17 (multiplied by the average number of lives covered under the plan).

For plan years ending on or after October 1, 2016 and before October 1, 2019, the fee will be further adjusted to reflect inflation in National Health Expenditures (which will be published in future IRS guidance).

Our PCORI Fees for Self-Insured Plans section features additional information on calculating and paying the fee.

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Reminder: PCORI Fees Due by July 31 for Employers Sponsoring HRAs and Other Self-Insured Plans

health-care-reform-road-sign-1Fees to fund the Patient-Centered Outcomes Research Institute (PCORI) are due July 31 from employers that sponsor certain self-insured health plans, including health reimbursement arrangements (HRAs) that are not treated as excepted benefits. The fee, which is required under Health Care Reform, applies to plan years ending on or after October 1, 2012, and before October 1, 2019.

Calculating the Fee
For plan years ending on or after October 1, 2014 and before October 1, 2015, the fee for an employer sponsoring an applicable self-insured plan is $2.08 (two dollars for plan years ending on or after October 1, 2013 and before October 1, 2014) multiplied by the average number of lives covered under the plan. Fee increases are based on increases in the projected per capita amount of National Health Expenditures.

Details on how to determine the average number of lives covered under a plan, as well as various examples, are included in the final regulations.

Reporting and Payment Deadline

Plan sponsors of applicable self-insured health plans are required to report and pay the fee no later than July 31 of the calendar year immediately following the last day of the plan year to which the fee applies. Fees are reported and paid using IRS Form 720, Quarterly Federal Excise Tax Return. The final regulations do not permit or include rules for third-party reporting or payment of the PCORI fee.