You may have heard about the Patient-Centered Outcomes Research Institute (PCORI) and the associated expenses. However, what is PCORI and how is it relevant to your company?
The Affordable Care Act (ACA)
established PCORI, an independent organization that carries out research to
assist healthcare customers in making better decisions for their individual
needs and results. The ACA requires sponsors of self-insured health plans to
pay a charge to finance PCORI.
Here are some Form 720 PCORI Instructions for those who owe this fee:
●
Generally, prepaid health care
plans with set premiums for health or accident coverage are known as specified
health insurance policies that are subject to PCORI costs.
●
Employers must pay the PCORI
charge if your company provides a self-insured health plan, such as an HRA.
● However, if an integrated HRA is provided when combined with a self-insured plan from the same plan sponsor, it is not subject to PCORI. For the PCORI charge, the HRA and medical plan are considered a single plan.
PCORI payments apply to organizations providing various benefits, such as:
●
Fully insured policies.
●
Plans with self-insurance.
●
HRAs.
● Health flexible spending accounts (FSAs) if employer contributions surpass $500 or the employee's contribution.
Which plans do not have to pay the PCORI fee?
The following health plans are exempt from the PCORI fee:
●
Government initiatives include the
Children's Health Insurance Programme (CHIP), Medicaid, and Medicare.
●
Insurance plans that solely
include excluded benefits, such as dental or eye.
●
Programs for wellness (so long as
they don't offer substantial benefits in terms of therapy or medical care).
●
Workers' compensation
●
Policies that only protect workers
from abroad.
●
Medical savings accounts from
Archer (MSAs).
●
Hospital Liability Protection.
● Accident-only insurance.
What is the cost of the PCORI?
The PCORI charge is $3.22 per covered life for plans ending on or before October 1, 2024. This cost is effective from October 1, 2023. Source: IRS
A yearly inflation adjustment is made to the amount by the Secretary of Health and Human Services. According to the Form 720 PCORI Instructions, if you owe a PCORI charge, you have until July 31st, the last day of the plan year. File the fee online to avoid the PCORI Penalty.
What is the PCORI fee due in 2024?
The due date for PCORI fee is July 31st every year. For plan years ending in 2023, the due date is July 31 2024, Wednesday.
How to calculate the PCORI "number of lives"?
There are three ways to calculate the fee as per the Form 720 PCORI Instructions published by the IRS:
If you provide numerous self-funded plans or an integrated HRA from a medical insurance provider, you also need to follow particular calculations for covered lives.
To know in detail, you can read our blog on PCORI Fee Reporting.
Conclusion
The deadline for submitting IRS Form 720 and paying PCORI fees for the employers who qualify is July 31.
Seamlessly file the PCORI Online with the IRS Authorized Simple720 today!