June 08, 2022
The Patient-Centered Outcomes Research Institute (PCORI) filing and fee payment deadline of August 1, 2022 for plan years ending in 2021 is quickly approaching (the traditional July 31st deadline is extended because July 31, 2022 falls on a Sunday). Plan sponsors of self-funded group health plans are responsible to file and pay the PCORI fee annually whereas fully-insured group health plans are assessed this fee in their monthly premium payments by their health insurance carriers.
PCORI Fee Background
The PCORI fee is a requirement under the Affordable Care Act to fund the Patient-Centered Outcomes Research Institute, focusing on clinical effectiveness research. It was scheduled to end for plan years ending on or after October 1, 2019. However, a federal spending bill passed by Congress in 2019 reinstated the PCORI fees and filings for another ten years, through 2029.
The PCORI fee is filed and paid annually on IRS Form 720 (Quarterly Federal Excise Tax Return). Employers with self-funded health plans ending in 2021 are advised to use the 2nd quarter Form 720 to file and pay the PCORI fee by August 1, 2022. The information is reported in Part II of Form 720.
Since Form 720 is a tax form, rather than an informational return form such as Form 5500, employers or their accountants, rather than third-party administrators, must prepare and file it.
For self-funded group health plans, the fee is calculated using the average number of lives covered under the plan, including all employees and covered dependents, and the applicable rate for that plan year, outlined in the table below and also accessed on the IRS website here.
HRAs/FSAs/HSAs/Excepted Benefits
For Health Reimbursement Arrangements (HRA), the IRS outlined two special PCORI fee-related rules. First, if the integrated medical plan is fully insured, then the plan sponsor may treat each employee's HRA as covering a single life and is not required to include all covered lives, such as covered dependents, when reporting and paying the PCORI fee.
Second, if the integrated group health plan is self-funded, then the HRA is not subject to a separate PCORI fee as long as the HRA and the self-funded group health plan have the same plan sponsor and have the same plan year. In this case, one PCORI filing and fee for the self-funded group health plan is due, based on all covered lives, not just employees (as noted in the paragraph directly above).
Generally, Health Care Flexible Spending Accounts (FSAs) are not subject to PCORI fees as “excepted benefits”. However, if an employer contributes to an FSA that exceeds the lesser of $500 annually or a dollar-for-dollar match of the employee’s contribution, then the FSA is not considered an “excepted benefit” and is subject to PCORI fees. Similar to the HRA with a fully-insured integrated medical plan, the plan sponsor may assume one covered life for each employee with an FSA.
Health Savings Accounts (HSA) are not subject to the PCORI fee requirements since HSAs are not group health plans, but rather individual accounts. The PCORI fee also does not apply to most dental and vision coverage since they are “excepted benefits,” exempt from PCORI fee requirements.
PCORI Filing and Payment Date Deadlines for 2022
|
Plan Year End Date |
PCORI Fee Rate |
Filing and Payment Date |
|
January 2021 |
$2.66/covered life |
August 1, 2022 |
|
February 2021 |
$2.66/covered life |
August 1, 2022 |
|
March 2021 |
$2.66/covered life |
August 1, 2022 |
|
April 2021 |
$2.66/covered life |
August 1, 2022 |
|
May 2021 |
$2.66/covered life |
August 1, 2022 |
|
June 2021 |
$2.66/covered life |
August 1, 2022 |
|
July 2021 |
$2.66/covered life |
August 1, 2022 |
|
August 2021 |
$2.66/covered life |
August 1, 2022 |
|
September 2021 |
$2.66/covered life |
August 1, 2022 |
|
October 2021 |
$2.79/covered life |
August 1, 2022 |
|
November 2021 |
$2.79/covered life |
August 1, 2022 |
|
December 2021 |
$2.79/covered life |
August 1, 2022 |
Click here for the IRS PCORI Fee Q&A webpage for additional information.
For employers that sponsor a self-funded group health plan, contact your Risk Strategies account team for PCORI fee calculation assistance and with any additional questions.
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