2022 PCORI Fees Due July 31, 2023

For those that have a medical plan with an HRA and/or are self-funded, this is a reminder your 2022 PCORI fee is due July 31, 2023.

The Affordable Care Act (ACA) requires health insurance issuers and self-insured plan sponsors to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). The fees are reported and paid annually using IRS Form 720, the Quarterly Federal Excise Tax Return.

Form 720 and full payment of the PCORI fees are due by July 31 of each year, and generally covers plan years that end during the preceding calendar year. For plan years ending in 2022, the PCORI fees are due by July 31, 2023. For plan years ending in 2021, the PCORI fees were due by Aug. 1, 2022 (since July 31, 2022, was a Sunday).

 

Who Does This Apply To?

The entity responsible for paying the PCORI fee depends on whether the plan is insured or self-insured.

• For fully insured health plans, the issuer (carrier) of the health insurance policy is required to pay the fees.
• For self-insured health plans (including HRA's), the fees are to be paid by the plan sponsor (employer).

When in question, please contact your North Risk Partners Risk Advisor.

 

Overview of the PCORI Fees

The PCORI fees were scheduled to expire for plan years ending on or after Oct. 1, 2019. However, a federal spending bill enacted at the end of 2019 extended the PCORI fees for an additional 10 years. As a result, these fees will continue to apply for the 2020-2029 fiscal years.

 

Calculating the PCORI Fee Payment

In general, the PCORI fees are assessed, collected and enforced like taxes. The PCORI fee is imposed on an issuer of a “specified health insurance policy” and a plan sponsor of an “applicable self-insured health plan” based on the average number of lives covered under the plan. Final rules outline a number of alternatives for issuers and plan sponsors to determine the average number of covered lives.

Using Part II, Number 133 of Form 720, issuers and plan sponsors report the average number of lives covered under the plan separately for specified health insurance policies and applicable self-insured health plans. That number is then multiplied by the applicable rate for that tax year ($2.79 for plan years ending on or after Oct. 1, 2021, and before Oct. 1, 2022, or $3.00 for plan years ending on or after Oct. 1, 2022, and before Oct. 1, 2023). The fees for specified health insurance policies and applicable self-insured health plans are then combined to equal the total tax owed.

 

Action Steps

To access their obligations, employers should:

• Determine which plans are subject to the PCORI fees;
• Assess plan funding status (insured versus self-insured) to determine whether the issuer or the employer is responsible for the fees; and
• For self-insured plans, select an approach for calculating average covered lives.

Directly below, you will find a PCORI fee payment schedule based on plan year start date. For easy reference, we’ve also included links to relevant forms and documents below. If you require assistance determining your member counts for your 2022 plan year, please contact your North Risk Partners' representative.

 

Payment Schedule

Plan Year	Fee Per Average Covered Life	Due Date
2/1/21 – 1/31/22	$2.79	July 31, 2023
3/1/21 – 2/28/22	$2.79	July 31, 2023
4/1/21 – 3/31/22	$2.79	July 31, 2023
5/1/21 – 4/30/22	$2.79	July 31, 2023
6/1/21 – 5/31/22	$2.79	July 31, 2023
7/1/21 – 6/30/22	$2.79	July 31, 2023
8/1/21 – 7/31/22	$2.79	July 31, 2023
9/1/21 – 8/31/22	$2.79	July 31, 2023
10/1/21 – 9/30/22	$2.79	July 31, 2023
11/1/21 – 10/31/22	$3.00	July 31, 2023
12/1/21 – 11/30/22	$3.00	July 31, 2023
1/1/22 – 12/31/22	$3.00	July 31, 2023

 

• 720 Tax Form (Revised March 2023)
• 720 Tax Form Instructions (Revised March 2023)
• How Fees Apply to Specific Types of Health Coverage or Arrangements