As a business owner or tax professional, it's important to understand all of the different taxes and fees that you may be responsible for. One such fee is the Patient-Centered Outcomes Research Institute (PCORI) fee, which is related to the Affordable Care Act (ACA) and is reported on Form 720. In this blog, we will explore what PCORI is and how it relates to Form 720.
The Patient-Centered Outcomes Research Institute (PCORI) is a non-profit organization created by the ACA. PCORI is responsible for conducting and funding research to identify the most effective health care practices and treatments. The goal of PCORI is to improve the quality of health care and provide patients with the information they need to make informed decisions about their care.
Form 720 is used to report and pay various excise taxes, including the PCORI fee. The PCORI fee is collected annually on health insurance policies and self-funded health plans. The fee helps fund PCORI's research, which is aimed at improving the quality and effectiveness of health care in the United States.
The PCORI fee is calculated based on the average number of covered lives under the plan or policy. A covered life is any individual who is covered by the plan for any part of the plan year. This includes employees, their spouses, and dependents.
The fee amount for plans or policies ending between October 1, 2020, and September 30, 2021, is $2.66 per covered life. The fee amount is adjusted annually for inflation.
The PCORI fee is reported on Form 720, which is due by July 31st of each year. The fee should be reported on the Patient-Centered Outcomes Research Trust Fund Fee line of Form 720.
If you are filing Form 720 for the first time to report the PCORI fee, you will need to complete Schedule C, which provides information on the number of covered lives under the plan or policy.
The PCORI fee is an important tax that businesses and health plans must pay to support research that helps improve the quality of health care in the United States. By understanding the PCORI fee and how it relates to Form 720, you can ensure that you are in compliance with all tax laws and regulations.