IRS PCORI Fees Due by July 31, 2024

May 21, 2024

The Patient-Centered Outcomes Research Institute (“PCORI”) fee was established as part of the Affordable Care Act (“ACA”) to fund medical research through the PCORI Institute. Employers and plan sponsors who sponsored a self-insured medical plan that ended anytime during calendar year 2023 are required to report and pay the PCORI fee no later than July 31, 2024. Detailed guidance regarding how to calculate, report, and pay the fee is provided on the IRS PCORI fee webpage. A summary of key facts is below.

Applicable Plans
Plan sponsors of fully insured medical plans are not responsible for paying the PCORI fee (the obligation rests with the insurer). Plan sponsors of most self-insured medical plans (including health reimbursement arrangements or HRAs) are required to pay the PCORI fee. Special rules apply, such as multiple self-insured arrangements established and maintained by the same plan sponsor and with the same plan year are subject to a single fee. See this IRS chart for details on the different types of plans subject to the fee.

Due Date 
The PCORI fee payment deadline is July 31, 2024, for plan years that end in calendar year 2023.

Fee Amount
PCORI fees are based on the average number of covered lives under the plan or policy. “Covered lives” generally include employees (and retirees) and their enrolled spouses and dependents, as well as individuals who are receiving COBRA or other continuation coverage. The PCORI fee due differs based on the employer’s plan year(s):

1. For plan years that ended on or after January 1, 2023 through September 30, 2023, the fee is $3.00 per covered life.
2. The fee payable for plan years ending on or after October 1, 2023 through December 31, 2023, is $3.22 per covered life.
3. Plan sponsors of self-insured medical plans must use one of three existing permissible methods to determine the average “covered lives” used for reporting and paying the PCORI fee. See Q&As 4-6 in the PCORI Fee FAQs.
4. Plan sponsors who made a change to their funding arrangement/plan offering during the 2023 calendar year (for example, moved to self-insured plan or added an HRA mid-year) may need to pay a PCORI fee for that plan year ending in 2023. And plan sponsors who made a change to their plan year causing there to be two plan year ending dates within the 2023 calendar year (short plan years) may need to pay a PCORI fee for both plan years. See Q&As 12-14 in the PCORI Fee FAQs.

Remittance
The PCORI fee is paid using the June version of IRS Form 720, Quarterly Federal Excise Tax Return, and completing Part II, Number 133(c) and (d) of Form 720. Note that we expect the IRS to shortly issue the second quarter 2024 June version of the Form which will reflect the correct 2023 fee amounts. Specific instructions regarding PCORI can be found on page 9 of the Form 720 Instructions. Plan sponsors who are not required to report any other liabilities on a Form 720 will be required to file the Form only once per year. Note that in the header of the Form, the quarter ending date should be completed as “June 30, 2024”, to indicate the Form is being filed for the 2024 second quarter. Plan sponsors are not required to pay the fee electronically, but if paid through the Electronic Federal Tax Payment System, the payment should be indicated as applied to the second quarter. If paid by mail, it is very important that the Payment Voucher (720-V) indicate the tax period for the fee is for the “2nd Quarter” (otherwise IRS may send a late notice).

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