Patient-Centered Outcomes Research Institute Fees, most commonly known as PCORI fees, were created in accordance with the ACA. PCORI Fees were scheduled to expire for plan years ending on or after October 1, 2019. With the enactment of a Federal spending bill at the end of 2019 PCORI fees have been extended for an additional 10 years through 2029. As a result, Notice 2020-44 increased the fee amount for plan years ending on or after October 1, 2019 and before October 1, 2020 to $2.54 per average number of lives covered under a plan. PCORI fees are required to be paid annually on IRS Form 720 by July 31 of each year. For plans ending in 2019, the next PCORI fee payment will be due July 31, 2020.
FSAs and HRAs
Generally, health care flexible spending accounts (FSAs) are not required to file a Form 720 unless the employer (and not just the employee) makes contributions that exceed the lesser of $500 annually or a dollar-for-dollar match of the employee’s contribution. Employers that have a fully-insured health plan coupled with an integrated HRA must pay the PCORI fee for the HRA, but they may treat each HRA participant as a single covered life. The fee generally does not apply to spouses or dependents covered under the HRA. When applicable FSA and HRA providers generally contact clients with guidance and direction on the filing of their PCORI fees.