PCORI Fees Apply Through 2029

A federal spending bill enacted at the end of 2019 included several provisions affecting benefit plans. The bill repealed three major taxes and fees under the Affordable Care Act (ACA)—the Cadillac tax, the medical devices excise tax and the health insurance providers fee.

The law also extended the PCORI fees for an additional 10 years. These fees will continue to apply for the 2020-2029 fiscal years.

Overview

The ACA created the Patient-Centered Outcomes Research Institute (PCORI) to help 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.

Under the ACA, the PCORI fees were scheduled to apply to policy or plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019. The PCORI fee is calculated based on the average number of lives covered under the policy or plan. The fee amount is set by the IRS each year.

Action Steps

• Determine which employee benefit plans are subject to the PCORI fees.
• Assess plan funding status (insured vs. self-insured) to determine whether the employer or a health policy issuer is responsible for the fees.
• For any self-insured plans, select an approach for calculating average covered lives