PCORI fees are due once a year in July. They have gone up slightly this year, but reporting requirements on Form 720 remain the same this year. For plans that ended in December 2022, PCORI fees are due July 31st of this year. Here's what you need to know about PCORI fees and Form 720!
The ACA imposes a fee on employers that offer certain types of self-insured health plans, which includes QSEHRA and ICHRA, to help fund the Patient-Centered Outcomes Research Institute (PCORI).
About the fee:
It is required to be reported only once a year in July.
It is reported on IRS Form 720.*
For plans that ended December 2022, the PCORI fee is $3.00 per employee, and it is due July 31, 2023. **
*Although Form 720 is a quarterly return, for PCORI, Form 720 is filed annually only, by July 31. If you have another reason to file the Form 720 on a quarterly basis, you only need to report the PCORI fee on the second quarter form, due July 31st.
The PCORI fee is calculated based on the number of covered lives in the self-insured health plan, which includes employees that have not waived coverage. The IRS offers various methods to calculate the average number of covered lives, and we recommend using the Snapshot Method, which involves counting covered lives during the same period each quarter.
When it comes to HRAs, the number of covered lives includes employees who have not opted out of coverage - sorry, no counting spouses or dependents! To determine your covered lives, you can easily reference your Take Command monthly invoice for any given month.
Also, note that if even if you do not owe a fee (if you had zero covered lives during the year), you do still have to mail in your completed and signed Form 720.
Rest assured, we're here to make the PCORI fee reporting process a breeze! Come June of each year, we'll supply you with two valuable resources: a projected count of your HRA-covered lives based on our system data, and detailed instructions on how to file Form 720 and pay the fee.
Let us help you stay on top of this requirement and keep your focus on what matters most - your business.
To file your Form 720, mail the completed Form 720, along with Form 720-V (Payment Voucher), and a check or money order for the total owed to the IRS:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0009
If you prefer, you can pay electronically through EFTPS. Electronic payments must be initiated before July 29th 8:00pm EST. Note that you'll still need to mail in your Form 720 even if you pay electronically.
For more detailed information, see the IRS Instructions for Form 720.
Note: The post is informational only. We are not licensed tax professionals (we’re the health people), and this information is not to be used as tax guidance. Please consult with your licensed tax professional on the usage of this information, calculation of fees, and completion of forms.