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The PCORI fee, or the Patient-Centered Outcomes Research Institute fee, is a fee instituted under the Affordable Care Act for funding research that enables patients and healthcare providers to make well-informed treatment decisions. The fee is on certain types of health insurance policies and self-insured health plans. If you are an employer with a self-funded plan or an insurer offering coverage, determining whether you owe the PCORI fee becomes very relevant to ACA compliance. The fee is reported and paid annually using IRS Form 720.

It is not everyone who pays the PCORI fee. The fee is generally required of issuers of health insurance policies specified and sponsors of applicable self-insured health plans. Have a look at what your organization provides: if it is major medical coverage or self-insured group health plans, you may be in the line for this. Employers providing HRAs or FSAs or other self-funded benefits may also require this to be checked out. Employers must assess their benefits plan to determine filing responsibility.

The fee amount is calculated on the basis of the average number of lives covered under the plan during the policy year. The IRS provides several calculation methods, including actual count, snapshot, and Form 5500. The fee must then be filed using **IRS Form 720**, which is due usually by **July 31st** of the year following the year-end of the plan year. With IRS providing up-to-date fee rates and understanding how to file accurately, you can always be compliant and avoid penalties.

Certain plans tend to be exempt from the above-mentioned PCORI fee. These include standalone dental and vision plans, certain expatriate plans, and employee assistance programs that do not provide substantial medical coverage. Moreover, self-insured plans whose exemption falls under ERISA or are classified to be church plans do not pay the fee. It is advisable to consult with a tax advisor or compliance expert to be sure your plan meets the criteria for exemption.

Lack of filing or misreporting of the fee can lead the IRS to impose penalties. Employers, plan sponsors, and insurers should review their health coverage offerings in regular intervals and update their compliance strategies. Consult trusted sources or a qualified tax professional to know if you owe this fee. Understanding whether or not you owe the PCORI fee is a small but significant step in fulfilling ACA requirements and protecting your business from unnecessary fines.