In 2010, the Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute (PCORI). It’s a government-sponsored organization that helps patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. The Institute’s research is funded, in part, by fees paid by health insurance issuers and sponsors of self-insured health plans.
PCORI Fee Update
Under the ACA, the PCORI fees were scheduled to apply to policy or plan years ending on or after October 1, 2012, and before October 1, 2019. On December 20, 2019, a the SECURE Act was signed into law that extends PCORI fees 10 years, through plan years ending until September 30, 2029 (for calendar year plans, the final fee payment will be due by July 31, 2029). This means that specified health insurance policies and applicable self-insured health plans must continue to pay these fees through 2029.
What Happens Next?
This fee will apply to plans with calendar year plan years that end on December 31, 2019 and that payment will be due by July 31, 2020. Note there is some question regarding the fee’s application to plan years ending between October 1, 2019 and December 19, 2019, but we expect that the IRS will offer additional guidance on the matter.
PCORI Fee Filing
Plan sponsors of self-inured plans should be prepared to file the Form 720 and pay the 2019 fee by July 31, 2020. Plan sponsors of insured plans will not owe the fee, but they could see their health premiums increase as insurers look to recoup the fee through increased premiums. The IRS has not yet issued the 2019 fee amount, but we expect the IRS will do so in the near future.
MidAmerica continues to monitor the development on this change and will ensure that our partners, clients, and participants receive the latest information available.