The Patient Centered Outcomes Research Institute (PCORI), created by The Affordable Care Act, is a private, nonprofit corporation. This institute helps consumers and health care providers make informed health care decisions by providing outcome based research for clinical effectiveness. PCORI is to be partially funded by fees paid by health insurance issuers and the employer of self-insured health plans (including HRAs).

Who Is Responsible for the PCORI Fee Payment?

For self-funded plans (including all HRA plans), the PCORI Fee is the responsibility of the employer that established or maintains the plan.

Calculation of the PCORI Fee

The amount of the annual fee is equal to the following:

               Plan Years Ends                                                     Formula

10/1/2012 – 09/30/2013

$1.00 * Average Number of Covered Lives

10/1/2013 – 09/30/2014

$2.00 * Average Number of Covered Lives

10/1/2014 – 09/30/2019

$2.00 + ( Inflation) * Average Number of Covered Lives

After 10/1/2019

No Fee

  •  -For HRA coverage, each subscriber may be treated as a single life, regardless of how many other dependents are actually covered. For example a family of five would be charged as one covered life.
  • -If your HRA plan ended between 10/1/2012-12/31/2012 you may need to pay the PCORI Fee by July 31, 2013.

Steps to Determine Cost?

1) Determine when your HRA plan ended to determine the per covered Lives Cost.

2) Determine if your HRA is considered an Excepted Benefit. Excepted Benefits are excluded from the PCORI Fee. Excepted Benefits included stand-alone dental and vision HRA plans.

3) Determine if you are eligible to consolidate the PCORI fee for the HRA with your self-insured medical plan. This does not apply to employers who offer a fully insured health insurance plan alongside an HRA.

How Do I Submit Payment?

The PCORI Fee must be recorded on the Revised IRS Form 720. Though this form is used for quarterly excise taxes, filers should only complete line 133. The revised IRS Form 720 should be remitted along with the payment voucher Form 720-V by July 31st of the calendar year immediately following the last day of the plan year.

Companies are required to take action to meet the obligations under the Patient Protection & Affordable Care Act (PPACA): Spring Insurance Group recommends that all employers with self-insured health plans (including all HRA plans) contact their accountant for additional details.

The above information is for informational purposes only and is not intended as legal advice.

The following two tabs change content below.
Teri Weber

Teri Weber

Partner at Spring Consulting Group, LLC
Teri Weber, ACI is a Senior Vice President with Spring Consulting Group. She has over 10 years of experience in health and welfare plan strategy, design, pricing, and implementation. She also works with absence management programs, including disability, family medical leave and leave of absence tracking. Her areas of expertise have allowed her to work with diverse employers and vendors to streamline processes and programs to meet the needs of insurers, administrators, employers and employees. Teri is on the Board for the New England Employee Benefits Council (NEEBC) and recently served as lead editor for the Disability Management Employer Coalition’s (DMEC) Return to Work Program Manual. Prior to joining Spring, Teri worked with Watson Wyatt, Buck Consultants and AON Consulting. In addition she was an Account Manager with Health Direct, Inc. Teri earned a BS at the University of Connecticut and a MBA at the University of Massachusetts. She holds an ACI designation and is a licensed broker in the states of MA and CT.