Patient-Centered Outcomes Research Institute (PCORI) Fee Requirement Increased
November 24, 2020 – The Internal Revenue Service (IRS) released Notice 2020-84 on November 24, 2020. Included in this Notice was an increase to the Patient-Centered Outcomes Research Institute (PCORI) fee to $2.66 per covered life for plan years ending on or after October 1, 2020 and before October 1, 2021. This is an increase of $0.12 per covered life from the prior year requirement of $2.54 per covered life.
Employers with self-funded plans subject to the PCORI fee requirement, including Health Reimbursement Accounts (HRAs), report and pay PCORI fees annually on IRS Form 720 with payment for applicable fees due by July 31st of the year following the plan year end date (e.g., for plan years ending December 31, 2020, payment and reporting will be due by July 31, 2021).
Background
The Patient Protection and Affordable Care Act (PPACA) was established in 2010 and requires issuers and employers to pay a deductible per capita fee to help fund the Patient-Centered Outcomes Research Institute (PCORI) Trust Fund for medical research.
On December 20, 2019, the Further Consolidated Appropriations Act of 2020 was signed into law. Included in this Act was a 10-year extension of the Patient-Centered Outcomes Research Institute (PCORI) through 2029. The PCORI fee was originally set to expire in 2020.
Third Party Administrators (TPAs) like Flores & Associates are neither allowed to file nor pay the PCORI fees on behalf of employers for the HRA plans they administer. For more information on the Patient-Centered Outcomes Research Institute (PCORI) and the fee, please visit: Patient-Centered Outcomes Research Institute Fee.
This update is provided by Flores & Associates is not to be considered tax advice. Please consult your employee benefits broker, tax professional, or legal counsel for compliance advice.
About Flores
Flores is a leading national administrator of tax-advantaged reimbursement plans including Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), Health Reimbursement Accounts (HRAs) and Commuter Benefit Accounts (CBAs). In addition to these account-based benefit options, they also handle COBRA and other direct bill services to meet the compliance needs of the employers they serve. In 2018, Flores introduced life.balanced. Reimbursement Accounts (LBA), an affordable post-tax lifestyle reimbursement account for the culture-driven employer. Based in Charlotte, NC, Flores has emerged as the leader in the CDHP market through a service model founded upon innovative technology, dedicated professionals, and an uncompromising commitment to superior service. For more information, visit the Flores website and follow them on LinkedIn.
- Cindy Bistany
- Director of Business Development and Strategic Alliances
- (828) 693-3595
- cindy@flores247.com
- Clay Peddycord, GBA, CFC
- Director of Business Development and Strategic Alliances
- (800) 532-3327
- clay.peddycord@flores247.com
- Aaron Hunt, MBA, CDHC, HSAe, Certified COBRA Administrator
- Director of Business Development and Strategic Alliances
- (800) 532-3327
- aaron.hunt@flores247.com