PCORI fees updated for 2023: Get ahead of the game!

Understanding the New 2023 PCORI Fees for Health Plans

The Patient-Centered Outcomes Research Institute (PCORI) is a non-profit organization that funds research to help patients and caregivers make better-informed healthcare decisions. To finance its operations, PCORI collects fees from health insurance issuers and self-insured health plans. In a recent update, the IRS has introduced new PCORI fees that will impact various health plans ending in 2023. This blog post will explain the details of these fees, who needs to pay them, and the deadlines involved.

Overview of the New PCORI Fees

• For plan years concluding in 2023, the following health plans will be required to remit PCORI fees:

• Self-insured plans

• Level funded plans (a type of self-insured plan)

• Fully insured plans with a Health Reimbursement Arrangement (HRA)

• These fees must be submitted no later than July 31st, 2024.

Calculating PCORI Fees The amount of the PCORI fee depends on when the plan year ends:

• Plans ending on January 1st, December 1st, or November 1st (2023) will be charged $322 per covered life.

• For all other plan years ending in 2023, the fee is $3 per covered life.
  

A "covered life" includes:

• Each employee, former employee, or dependent covered by the plan

• Spouses and children are counted as separate covered lives
  

Payment and Reporting Process

• The PCORI fees are to be paid directly to the IRS using Form 720 (Quarterly Federal Excise Tax Return).

• It's essential to note that the responsibility for paying these fees lies with the entities offering the health plans—neither the broker, insurance carrier, nor third-party administrator (TPA) will cover these fees.

• However, brokers, carriers, and TPAs may be able to provide assistance in generating the required data for Form 720, such as the number of covered lives.
  

Additional Context

• PCORI was established as part of the Affordable Care Act (ACA) in 2010.

• The fees help fund research studies that evaluate the effectiveness of medical treatments, services, and delivery methods.

• The research findings aim to assist patients, caregivers, employers, and policy makers in making informed healthcare decisions.
  

Conclusion PCORI fees remain a common point of confusion for BCS clients. Whether the question is about who has to pay it, when, or how much, hopefully this blog will help.

By understanding the calculation methods and payment deadlines outlined, brokers can help employers can ensure compliance and avoid any penalties.