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PCORI Fee Adjusted for 2020


1 minute read

The Affordable Care Act imposes a fee on health insurance issuers and self-insured plan sponsors in order to fund comparative effectiveness research. These fees are called PCORI fees and they were scheduled to expire for plan or policy years ending on or after October 1, 2019. Last year, a spending bill extended the fees for another 10 years.

As a result, the IRS issued Notice 2020-44, which increases the fee for plan years ending on or after October 1, 2019, and before October 1 2020, to $2.54 multiplied by the average number of lives on the plan. Transition relief for calculating the average number of lives is also included. To calculate the average number of covered lives you can use the existing methods or any reasonable method as long as it is applied consistently for the duration of the plan year.

PCORI fees must be paid annually using IRS Form 720 by July 31 of each year. For plans ending in 2019, the next payment is due July 31, 2020. Form 720 has not yet been updated for plan years ending on or after October 1, 2019.

Download the bulletin for more details.

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National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Steve Smith

Steve Smith

Steve Smith, Employee Benefits Consultant for National Insurance Services, has his energy level permanently set at “high.” His maxim is “work hard, play hard.” Steve’s an expert in getting groups of people working together for a higher cause. Minnesota schools, cities, and counties rely on Steve’s unique and creative ideas of engaging employees in their own health and wellness to lower utilization trends. He has 20+ years in the health insurance field doing compliance, cost mitigation, utilization, analytics, wellness plans, and strategic planning. Steve is a licensed insurance agent and holds the designations for Managed Healthcare Professional (The Health Insurance Association of America), Certified Patient Protection and Affordable Care Act Professional (National Association of Health Underwriters), and Group Benefits Disability Specialist (Hartford School of Insurance). He specializes in Employee Benefits Consulting for Minnesota schools, cities, and counties including fully insured, self-insured, and stop-loss plans.