The IRS has provided Q&As regarding the Patient-Centered Outcomes Research Institute (PCORI) fee. The fee applies to issuers of specified health insurance policies as well as plan sponsors of applicable self-insured health plans. The amount of the PCORI fee equals the average number of lives covered during the plan year multiplied by the applicable dollar amount ($2.08 for plan years ending between September 30, 2014 and October 1, 2015).
The Q&As provide a high-level overview of the PCORI fee requirements, but direct readers to the PCORI fee final regulations published in 2012 for more detailed information
Some of the highlights of the Q&As include:
- Issuers and plan sponsors can determine the average number of lives covered by the plan by using one of four alternative methods described in the final regulations. The alternatives are the actual count method, the snapshot method, the member months method, or the state form method.
- Issuers and plan sponsors will file Forms 720 annually to report and pay the PCORI fee. Form 720 is due on July 31 of the year following the last day of the plan year. If only the PCORI fee is reportable on a Form 720, then the filer is only required to file it once a year. If other liabilities are reportable on a Form 720, then the filer must file quarterly and should use their second quarter form to report and pay the PCORI fee.
- Tax-exempt organizations are typically subject to the PCORI fee for self-insured health plans that they sponsor, unless they are an exempt governmental program.
- Issuers and plan sponsors can correct previously filed Forms 720 by filing a Form 720X.