Employee Benefit News for School, City and County Employers

PCORI Fee Adjusted for 2020

Written by Steve Smith | Jun 10, 2020 12:44:06 PM

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.