|This week, the IRS released Notice 2023-70 that adjusts the amount of the PCORI fee for health plan or policy years that end on or after October 1, 2023 and before October 1, 2024. The new fee is $3.22. The adjustment is a $0.22 increase to the current $3.00 fee.
Background – Patient Centered Outcomes Research Institute (PCORI) Trust Fund Fees
|What is the PCORI Fee?
As part of the Affordable Care Act (ACA), the fee – which applies to group health plans – was implemented to fund research that equips patients and providers with information to assist in shaping well educated health care decisions. Because Health Reimbursement Arrangements (HRAs) are defined as a form of health insurance, they are subject to the fee…which is paid annually and is imposed through 2029.
Who Pays the PCORI Fee?
What is the Fee Amount?
PCORI fees for group health insurance plans are based on the number of covered lives; however, for HRAs they are based on the number of covered employees.
How is the Average Number of Covered Employees Determined/Calculated?
Listed below are two methods that can be used to calculate the average number of covered employees. Plan sponsors can change the calculation method used for different plan years, but must use the same method within the same plan year.
To make this process easier for our clients, DBS has an online PCORI Calculator that administrative users can access through A.S.A.P. online. If you are not already an administrative user, please contact your DBS Claim Specialist to set up your online account and begin using this feature.
To Utilize the DBS Online PCORI Calculator:
When do Plan Sponsors Report and What Form Should be Used?
The plan sponsor (employer) must file IRS Form 720 (Quarterly Federal Excise Tax Return) annually stating the PCORI fee liability.
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