PCORI Fee Increased for Plan Years Ending After October 1, 2020

Employee Benefits | 3/19/2021

Written By: Patrick Haynes, Esq.

The IRS is raising the fee that insurers or self-insured health plan sponsors will pay in 2021 to fund the federal Patient-Centered Outcomes Research Institute (PCORI) trust fund. The fee will be $2.66 per plan enrollee, up from $2.54 for the 2020 plan year, according to Notice 2020-84, which the IRS issued on November 24, 2020. The annual fee must be paid to the IRS by July 31 for plan years ending between Oct. 1, 2020, and before Oct. 1, 2021, which includes calendar-year plans.

The annual fee must be paid to the IRS by July 31st for plan years ending between Oct. 1, 2020, and before Oct. 1, 2021, which includes calendar-year plans. Please note that for plan years ending in 2020, the traditional July 31st deadline has been extended to Monday, August 2nd since this particular July 31st falls on a Saturday. For additional information on when PCORI is due for your plan and the applicable rate that must be utilized to perform the calculations please see the IRS’ guidance here

For fully insured employers, the fee is paid by the insurance provider, although the cost may be factored into premium increases. Self-insured employers pay the annual PCORI fee directly to the IRS.

Self-Funded plans (including employers with fully insured medical/Rx plans that include a self-funded HRA) must remit the PCORI fee to the IRS along with an IRS Form 720. (Note: The IRS has not yet updated Form 720 with the new rate for 2021).

You may recall that PCORI was previously due to sunset in 2019, but was extended by Congress through 2029 (see our prior guidance here). 

If you are looking for more specific details on how to calculate PCORI, please feel free to refer to the IRS’ calculation methodologies here or contact your Account Manager for assistance.

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