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PCORI Fees Due by July 31, 2019


Under the Affordable Care Act (ACA) a fund was created to assist in clinical effectiveness research. To aid in the financial support for this endeavor certain health insurance carriers and health plan sponsors are required to pay fees based on the average number of lives covered by welfare benefits plans. These fees are referred to as either Patient-Centered Outcome Research Institute (PCORI) or Clinical Effectiveness Research (CER) fees.

The applicable fee was $2.39 for plan years ending on or after October 1, 2017, and before October 1, 2018. For plan years ending on or after October 1, 2018, and before October 1, 2019, the fee is $2.45. Indexed each year, the fee amount is determined by the value of national health expenditures. The fee phases out and will not apply to plan years ending after September 30, 2019.

As a reminder, fees are required for all group health plans including Health Reimbursement Arrangements (HRAs), but are not required for healthcare Flexible Spending Accounts (FSAs) that are considered excepted benefits. To be an excepted benefit, health FSA participants must be eligible for their employer's group health insurance plan and may include employer contributions in addition to employee salary reductions. However, the employer contributions may only be $500 per participant or up to a dollar for dollar match of each participant's election

HRAs exempt from other regulations would be subject to the PCORI fee. For instance, an HRA that only covered retirees would be subject to this fee, but those covering dental or vision expenses only would not be, nor would employee EAPs, disease management programs, and wellness programs be required to pay PCORI fees.

Fees are reported and paid once per year with the submission of Form 720 (Quarterly Federal Excise Tax Return). The completed Form 720 is due by July 31, 2019.

See our previous Compliance Alert for information regarding methods for calculating the fee.