PCORI Fee Overview

May 20, 2021 | COVID-19 HRA Industry News Quick Alerts

PCORI Filing Due Dates and Applicable Rates

The Affordable Care Act imposed a fee on applicable self-insured health plans  (i.e. HRA plans) to help fund the Patient-Centered Outcomes Research Institute (PCORI). As a result, the PCORI fee, which is to be reported only once a year on the second quarter Form 720, is now due again by this July 31, 2021. As in the past OCA has already taken steps to calculate the PCORI fee for applicable employers.  OCA will be sending “client specific” emails to each applicable employer during the week of June 14th with their calculated PCORI fee amount. Employers will then be responsible for paying and remitting the PCORI fee by July 31st. In addition, we’ve put together a helpful PCORI Fee FAQ (see below) that explains who’s responsible to pay it, how much is the fee, and how is it paid

How much is the PCORI fee?

Under an HRA, the amount of the PCORI fee is equal to the average number of enrolled employees lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year. For policy and plan years ending:

  • after September 30, 2020, and before October 1, 2021, the PCORI fee is $2.66
  • after September 30, 2019, and before October 1, 2020, the PCORI fee is $2.54

To see a complete listing of the fee schedule, please click here

Who Pays the PCORI Fee?

For HRAs, the Plan Sponsor ( the employer ) must pay a fee for each covered HRA employee (dependents and any other beneficiaries can be ignored) . This fee is due July 31st of the calendar year following the end of the plan year being reported. The fee is remitted using IRS Form 720, the Quarterly Federal Excise Tax Return.  Each applicable employer will have to make a check payable to the “United States Treasury Department” and mail to the below address.  For more information on e-file, visit the IRS website here.

Mailing Address:

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0009

To view the latest Form 720 and instructions, click here.

If enrolled with Members Health Plan (MHP):  OCA and Members Health Plan have interpreted the rules that the employer does not need to pay a separate PCORI fee under the HRA since MHP is already paying it. However, it’s a very complicated interpretation. Some counsel have suggested otherwise, which is why we recommend the employer look to their own counsel for guidance if they choose. With all that said, the fee is so minimal that it may just be safer to pay it separately.

If you want to calculate your own PCORI fee we recommend the following: 

Generally, plan sponsors of applicable self-insured health plans must use one of three methods to determine the average number of lives covered under a plan for the plan year. If running the report on your own, OCA recommends using the Snapshot Count Method.  The snapshot count method is based on the total number of lives covered on one date during the first, second or third month of each quarter, and dividing that total by the number of dates on which a count was made.  So, if the first day of each quarter is used as the designated date, then the average is determined by adding the number of lives covered on the first day of each quarter and dividing by four.

Example HRA PCORI Fee Calculation:

ABC Company HRA Enrollment Count on the 1st day of each quarter in 2020.

  • January 1, 2020- 20 Enrolled
  • April 1, 2020- 22 Enrolled 
  • July 1, 2020- 24 Enrolled 
  • October 1, 2020- 26 Enrolled 

Using the Snapshot method the average number of lives is 23 lives (20+22+24+26/4). Then multiple 23 average lives X the PCORI fee of $2.66. The PCORI fee is $61.18 (23 lives X $2.66)

Identifying which “Plan Years” Who Owe the PCORI Fee by July 31, 2021

Policy or Plan Ending Date in month of:File return no later than:  Applicable rate:
Jan – 2020July 31, 2021$2.54
Feb – 2020July 31, 2021$2.54
March – 2020July 31, 2021$2.54
April – 2020July 31, 2021$2.45
May – 2020July 31, 2021$2.54
June – 2020July 31, 2021$2.54
July – 2020July 31, 2021$2.54
Aug. – 2020July 31, 2021$2.54
Sep – 2020July 31, 2021$2.54
Oct – 2020July 31, 2021$2.66
Nov – 2020July 31, 2021$2.66
Dec – 2020July 31, 2021$2.66

To see a complete listing of the fee schedule, please click here.