PCORI Fee Indexed in IRS Notice 22-04

The Patient Centered Outcomes Research (PCOR) Institute created by the Affordable Care Act (ACA) was funded by a temporary fee on health plans.  While insurance companies typically take care of reporting and paying this fee for insured plans, an employer with a health reimbursement arrangement or a self-funded health plan is responsible to report and pay this fee each year by July 31 on IRS Form 720.

The fee started out at $1 per employee per year, then increased to $2 the second year, and then has indexed incrementally each year since.  The IRS has announced in Notice 22-04 that the next indexing amount is $2.79.  This essentially means by Monday, August 1, 2022 (since July 31 falls on a weekend):

  • Plan years ending during the first three quarters of 2021 will pay $2.66 per employee, and
  • Plan years ending during the fourth quarter of 2021 will pay $2.79 per employee.

It can be a bit confusing how the fee is based on plan year end date (rather than start date) and is not pro-rated for short plan years.  We have provided a chart below to help employers identify the fee and due date for a typical 12-month plan year based on plan year start date.

 

Self-Funded
Plan Year Ends
For a typical 12-month plan, Self-Funded Plan Year Began PCOR Fee Due to IRS on
Form 720 by
1/1/20 – 9/30/20 Non-CY Feb through Oct 2019 $2.54 Mon 8/2/21
10/1/20 – 12/31/20 Nov ’19, Dec ’19, or Jan ’20 $2.66 Mon 8/2/21
1/1/21 – 9/30/21 Non-CY Feb through Oct 2020 $2.66 Mon 8/1/22
10/1/21 – 12/31/21 Nov ’20, Dec ’20, or Jan ’21 $2.79 Mon 8/1/22
1/1/22 – 9/30/22 Non-CY Feb through Oct 2021 $2.79 Mon 7/31/23

 

While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept  liability  for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice or services. Readers should always seek professional advice before entering into any commitments.


About Michelle Cammayo, Compliance National Practice Leader, Employee Benefits

Michelle Cammayo has close to 20 years of Employee Benefits experience specializing in all lines of health and welfare benefits. Today, Michelle works closely with clients and partners to provide guidance in areas of the law including ERISA, HIPAA, COBRA, FMLA and PPACA. She is also the IMA National Practice Leader for Compliance and endeavors to ensure IMA helps its clients manage and eliminate risk in the most effective manner. She is passionate about educating others and her passion for this shined in the COVID era where Michelle conducted weekly and then monthly webinars providing guidance to employers. Her podcast, Cammayo’s Compliance Talk, has gained popularity in the last three years to become a favorite amongst our clients. She also contributes regularly to our Blog and has authored several articles for industry-related newsletters. Michelle’s consultative approach with employers provides practical advice as employers endeavor to be compliant.

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