IRS Releases Adjusted PCOR Fee
The annual fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI), paid by employers that sponsor self-insured health plans and by commercial group health insurance providers, will go up by .09 cents per employee or dependent enrolled in the health plan from $2.45 (filed July 31, 2020) to $2.54 (filed July 31, 2021). The fees are always due by July 31 filed on Form 720.
For self-funded plans, the self-insured employer is responsible for submitting the fee and accompanying paperwork to the IRS. PCOR fees are reported on IRS Form 720, Quarterly Federal Excise Tax Return. On page two of Form 720, under Part II, the employer needs to designate the average number of covered lives under its applicable self-insured plan. Although the fee is paid annually, employers should indicate on the Payment Voucher (720-V)—located at the end of Form 720—that the tax period for the fee is the second quarter of the year. Failure to properly designate ‘2nd Quarter’ on the voucher will result in the IRS’s software generating a tardy filing notice.
The ACA’s PCOR fee had expired with the 2019 plan year, although non-calendar year plans were still required to remit their fees on July 31, 2020. However, as part of the 2019 year end budget/spending bill, Congress authorized an extension of the Patient Centered Outcomes Research Institute Fee (PCOR) for another ten years through 2029.
Clients who have elected to have Diversified Group assist with the PCOR fee calculation can expect an email in June which will include a copy of the completed Form 720 and a PCOR calculation worksheet with supporting documentation. Clients will need to file the Form 720 by July 31, 2020.