2024 PCORI Reporting

Annual PCORI reporting and fee payment is due July 31, 2024. Employers with a self-funded or level-funded plan must complete these requirements themselves. Fully funded plans are reported, filed, and paid by the insurance carrier.

Overview of PCORI Reporting

PCORI stands for Patient-Centered Outcomes Research Institute. The PCORI fee funds the PCORI Trust Fund which is part of the Affordable Care Act (ACA). This trust fund supports empirical research to improve evidence-based medicine.

The PCORI fee was implemented in 2012 and is scheduled to sunset in October 2029. This fee is due by July 31 of the year following the end of the plan year.

Calculating PCORI Fees

The PCORI fee is calculated by multiplying the current published PCORI rate by the average number of insured participants, including dependents, during the plan year.

Who is Required to Complete PCORI Reports?

Plans required to complete PCORI reporting and pay associated fees include:

• Self-insured plans (single and multiple plans)
• Health insurers (single and multiple plans)
• COBRA and mini-COBRA coverage
• Retiree coverage
• State/local plans
• Health Reimbursement Arrangements (HRA)*
• Flexible Spending Arrangements (FSA)*

*HRA and FSA reporting is only required if the provider is different from the insurer.

PCORI Exemptions

Certain plans do not require PCORI fees. These plans include:

• Employee Assistance Plans, wellness programs, or disease management programs, provided they do not offer substantial medical care or treatment.
• Stand-alone dental or vision plans,
• Health Savings Arrangements (HSA),
• Medical Savings Accounts (MSA),
• Medicare and Medicaid (including supplemental plans),
• Children’s Health Insurance Program (CHIP),
• Disability income,
• Workers’ Compensation income,
• Plans offered through branches of the United States Armed Forces, and
• Certain Native American tribal plans.

Methods for Calculating

There are four accepted methods for calculating the number of participants covered by self-insured or level-funded plans.

1. Form 5500: Employers can use the data submitted on annual Form 5500 or Form 5500-SF.
2. Snapshot: Employers can take a snapshot of the number of covered persons on any one day in a fiscal quarter, use the same quarterly period for each of the other quarters, and then average the four numbers.
3. Snapshot Factoring: Employers may take the total plans enrolled and count employee only as 1, employee + spouse as 2, employee + children as 1.85, and family as 2.85.
4. Actual Count: Employers can count the total number of people covered for each day of the plan year and divide by the number of days in the plan year to obtain an average.

If the plan covers the fees for HRA or FSA programs, the fee is paid once and only for the employee, not for dependents. This also applies to COBRA participants and retirees in an HRA or FSA plan.

Separate payments are required for employees participating in both a fully funded plan and an HRA or FSA. However, if the employer contributes less than $500 to an employee FSA account and offers a fully funded group health plan, the FSA is exempt from PCORI fee requirements.

Note: Employers can change the calculation method from one plan year to the next.

How to Report PCORI Fees

PCORI fees are payable using Form 720 “Quarterly Federal Excise Tax Return” for the second quarter of each year, reported in part II. Although Form 720 is a quarterly filing, The PCORI reporting is only due with the second quarter filing by July 31.

Payments are made directly to the IRS:

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0009

 Note: This is the national address for all PCORI filings, not just Utah employers.

Reporting Form 720 Corrections

Corrections or revisions to previously filed Forms 720 are made using Form 720-X. This includes late filings and adjustments resulting in overpayment.

Adjustments must be filed within three years from the original return filing date or due date. Late payments may incur additional IRS penalties, which can be waived for reasonable cause if the failure was not due to willful neglect.

Are You Prepared to Meet PCORI Requirements?

PCORI reporting is an often misunderstood aspect of the ACA requirements. If you have questions, need a more in-depth review, or need help with your PCORI fees, contact HR Service, Inc. We assist self-funded and level-funded groups with completing Form 720 and submitting fee payments.

Written by: HR Solutions Team & Penny Clark