Businesses must pay the Affordable Care Act’s “PCORI Fee” for the first time this July.
This fee is assessed on self-insured and fully insured health plans to fund PCORI, the Patient-Centered Outcomes Research Institute, which was established to conduct and promote clinical effectiveness research. The fee for fully insured plans is paid by the health insurance carrier.
The fee for self-insured health plans is paid by the plan sponsor (typically employers). The fee is $1 for each covered life for plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2013; $2 for each covered life for plan years ending on or after Oct. 1, 2013, and before Oct. 1, 2014; and an increased amount each year thereafter through plan years ending before Oct. 1, 2019. Covered lives include employees, spouses and dependents.
The tax-deductible fee must be reported on IRS Form 720, Quarterly Federal Excise Tax Return, and paid no later than July 31, 2013, for plan years ending during the last quarter of 2012.
This fee was not delayed in the Administration’s recent healthcare announcement and there are severe penalties under the ACA for failures to comply.