The Patient Centered Outcomes Research (PCOR) Institute created by the Affordable Care Act (ACA) was funded by a temporary fee on health plans. While insurance companies typically take care of reporting and paying this fee for insured plans, an employer with a health reimbursement arrangement or a self-funded health plan is responsible to report and pay this fee each year by July 31 on IRS Form 720.
The fee started out at $1 per employee per year, then increased to $2 the second year, and then has indexed incrementally each year since. The IRS has announced in Notice 22-59 that the next indexing amount is $3.00. This essentially means by Monday, July 31, 2023:
- Plan years ending during the first three quarters of 2022 will pay $2.79 per employee, and
- Plan years ending during the fourth quarter of 2022 will pay $3.00 per employee.
It can be a bit confusing how the fee is based on plan year end date (rather than start date) and is not pro-rated for short plan years. So we provide a chart below to help employers identify the fee and due date for a typical 12-month plan year based on plan year start date.
We provide a more comprehensive overview of how to calculate your PCOR fee each June, a little closer to the July 31 due date. But please let your IMA Benefits team know if you have any questions.
| Self-Funded Plan Year Ends | For a typical 12-month plan, Self-Funded Plan Year Began |
|
Due to IRS on Form 720 by |
| 1/1/21 – 9/30/21 | Non-CY Feb through Oct 2020 | $2.66 | Mon 8/1/22 |
| 10/1/21 – 12/31/21 | Nov’20, Dec’20, or Jan’21 | $2.79 | Mon 8/1/22 |
| 1/1/22 – 9/30/22 | Non-CY Feb through Oct 2021 | $2.79 | Mon 7/31/23 |
| 10/1/22 – 12/31/22 | Nov’21, Dec’21, or Jan’22 | $3.00 | Mon 7/31/23 |
| 1/1/23 – 9/30/23 | Non-CY Feb through Oct 2022 | $3.00 | Wed 7/31/24 |
Written by: KC Rippstein
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.