Seyfarth Synopsis: We previously blogged that the so-called Cadillac tax was movin’ out. Well, the Patient-Centered Outcomes Research Institute (“PCORI”) fee is moving back in. On December 20th, the President signed the “Further Consolidated Appropriations Act, 2020” (the “Act”), which repealed the Cadillac tax as well as the annual fee on health insurance providers. The Act, however, reinstates the PCORI fee paid by health plans for an additional 10 years.
The Affordable Care Act established the Patient Centered-Outcomes Research Institute to support research on clinical effectiveness. The Institute has been funded in part by fees paid by certain health insurers and sponsors of self-insured health plans. The PCORI fee is determined by multiplying the average number of covered lives for the plan year times the applicable dollar amount, and is paid annually to the IRS using Form 720. The applicable dollar amount as set by the IRS for 2018 was $2.45 per covered life.
Under the ACA, the PCORI fees were scheduled to apply to plan years ending before October 1, 2019. This meant that the final 2018 PCORI payment for calendar year plans was due July 31, 2019. Under the Act, however, the PCORI fee is now extended to plan years ending on or before September 30, 2029, and the last payment for calendar year plans will be July 31, 2029.