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IRS Releases Final PCORI Regulations Imposing | Aon

IRS Releases Final Regulations Imposing PCORI Fee on Sponsors of Fully Insured and Self-Insured Health Plans


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The Internal Revenue Service (IRS) issued final regulations on December 5, 2012, requiring health insurance issuers and plan sponsors of self-insured health plans to finance the Patient-Centered Outcomes Research Institute (PCORI) Trust Fund through the payment of an annual fee (the PCORI fee). The Trust Fund, which was implemented as part of the Patient Protection and Affordable Care Act (Affordable Care Act), will fund the Institute’s research into the comparative effectiveness of medical treatments.

The PCORI fee is imposed on health insurance issuers and plan sponsors of self-insured health plans for plan or policy years ending on or after October 1, 2012 and before October 1, 2019. The fee imposed is based on the average number of covered lives. For plan or policy years ending on or after October 1, 2012 and before October 1, 2013, the fee is one dollar ($1) multiplied by the average number of covered lives for that plan year. The fee then increases to two dollars ($2) for plan years ending on or after October 1, 2013. For plan years ending on or after October 1, 2014, the fee increases are based on a formula that includes increases in the projected per capita amount of National Health Expenditures provided by the Department of Health and Human Services (HHS).

The final regulations apply to plan or policy years ending on and after October 1, 2012 and before October 1, 2019.

The Aon Hewitt bulletin below discusses:

  • The PCORI fee (for sponsors of both fully insured and self-insured health plans);
  • How to calculate covered lives; and
  • The reporting and payment of fees on IRS Form 720.

IRS Releases Final Regulations Imposing PCORI Fee on Sponsors of Fully Insured and Self-Insured Health Plans