October 18, 2023 New dollar amount for PCORI fee calculation is $3.22 per covered life In Notice 2023-70, the IRS announced that the Patient-Centered Outcomes Research Institute (PCORI) fee for plan years that end on or after October 1, 2023 and before October 1, 2024, is based on the applicable dollar amount of $3.22. Background The PCORI fee was mandated by the Affordable Care Act to help fund research on the comparative effectiveness of medical treatments. The fees must be paid by July 31 following the last day of the plan year (e.g., for policy years and plan years ending on December 31, 2023, the fee is due by July 31, 2024). The PCORI fee was originally scheduled to sunset on September 30, 2019. In December 2019, the Further Consolidated Appropriations Act of 2020 extended the PCORI fee for 10 years, so it continues to apply to all plan years ending on or before September 30, 2029. Calculating PCORI fees Under the Affordable Care Act, issuers of specified health insurance policies (under IRC Section 4375) and plan sponsors of self-insured health plans (under IRC Section 4376) must pay PCORI fees calculated by using the average number of lives covered under the policy or plan multiplied by the applicable dollar amount for that policy year or plan year. Notice 2023-70 updated the dollar amount to $3.22 for calculating the fee for plan years ending between October 2023 and October 2024. For policy years and plan years that end on or after October 1, 2022, and before October 1, 2023, the adjusted applicable dollar amount is $3.00. Implications Employers with a calendar-year health plan (with the plan year ending on December 31 each year) should have procedures in place to make sure they file IRS Form 720, Quarterly Federal Excise Tax Return, and pay their PCORI fee at a rate of $3.22 per covered life on or before July 31, 2024. ———————————————
Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor | |||||||||||
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