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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 2020-84, which increases the fee for plan years ending on or after October 1, 2020, and before October 1, 2021, to $2.66 multiplied by the average number of lives on the plan.
PCORI fees must be paid annually using IRS Form 720 by July 31 of each year. For plans ending in 2020, the next payment is due August 2, 2021 (since July 31, 2020 is a Saturday). Covered employers should have reported and paid PCORI fees for 2019 by July 31, 2020.
Transition relief was available for the 2020 PCORI fee calculation but it has not been extended for the 2021 plan year. Plans and issuers must use the existing methods for calculating the PCORI fee for 2021.
Download the bulletin for more details.