Is the PCORI fee paid through a payroll company?
What is the PCORI Fee? – A Quick Introduction
The PCORI Fee, or Patient-Centered Outcomes Research Institute Fee, was established under the Affordable Care Act (ACA). It is designed to fund the PCORI organization, an independent, non-profit entity that conducts research to improve healthcare outcomes and decision-making.
This fee supports studies that evaluate the effectiveness of various medical treatments, with the goal of enhancing the quality of healthcare across the U.S. The PCORI Fee is applicable to issuers of certain health insurance policies and sponsors of applicable self-insured health plans.
Does the Payroll Company Pay the PCORI Fee?
Role of Payroll Companies in PCORI Fee Filing:
Administrative Support: Payroll companies help with the administration and reporting requirements related to the PCORI Fee.
Compliance Guidance: They ensure that the fee is correctly paid by the appropriate party—either the issuer or sponsor of the health plan—to help the business remain compliant.
Calculation & Preparation: Many payroll providers offer services such as calculating the average number of covered lives, preparing IRS Form 720, and guiding employers through the fee payment process.
While payroll companies assist with the process, the actual responsibility for paying the PCORI Fee lies with the plan sponsor or insurance issuer—not the payroll provider.
Wondering who exactly is responsible for the fee and how it should be filed? Keep reading to find out more.
Who pays the PCORI Fee?
The responsibility for paying the PCORI Fee depends on the type of health plan an organization offers. It generally falls on employers, plan sponsors, or insurance providers.
PCORI Fee for Self-Insured Plans - If an employer provides a self-insured health plan, they are typically responsible for paying the PCORI Fee directly to the IRS.
PCORI Fee for Fully Insured Plans - In the case of fully insured plans, the insurance carrier is usually responsible for paying the PCORI Fee. However, employers may still need to supply relevant information—such as the number of covered lives—to assist the insurer in filing accurately.
HRAs (Health Reimbursement Arrangements) - HRAs are considered self-funded plans. Therefore, if an employer offers an HRA, they are responsible for paying the PCORI Fee, even if it’s offered alongside a fully insured plan.Pro Tip - Regardless of who is required to pay, the PCORI Fee must be submitted using IRS Form 720. Choosing the right filing method is essential for a smooth experience.
Choose online filing and complete your submission in just a few minutes using our IRS-authorized PCORI Submission portal.
WRAP:
Understanding the PCORI Fee. Who pays it and how - is key to staying compliant with IRS requirements. While payroll companies assist with the process, the actual responsibility lies with the plan sponsor or insurer.
File your PCORI Fee for 2025 Online with Simple720 PCORI Portal!