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 23-70 that the next indexing amount is $3.22. This essentially means by Wednesday, July 31, 2024:
- Plan years ending during the first three quarters of 2023 will pay $3.00 per employee, and
- Plan years ending during the fourth quarter of 2023 will pay $3.22 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 provide 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.
We will provide a more comprehensive overview of how to calculate your PCOR fee each June, a little closer to the July 31 due 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|
|1/1/21 – 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|
|10/1/22 – 12/31/22||Nov ’21, Dec ’21, or Jan ‘22||$3.00||Mon 7/31/23|
|1/1/23 – 9/30/23||Non-CY Feb through Oct 2022||$3.00||Wed 7/31/24|
|10/1/23 – 12/31/23||Nov ’22, Dec ’22, or Jan ‘23||$3.22||Wed 7/31/24|
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.