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Employers sponsoring certain self-insured health plans are subject to the PCORI fee imposed pursuant to the Affordable Care Act (ACA). Understanding your employer responsibilities about PCORI is vital to IRS compliance and unnecessary penalties. This guide outlines the key deadlines, reporting requirements, and payment obligations employers must follow

Patient-Centered Outcomes Research Institute (PCORI) fee is a charge imposed annually upon issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans. The purpose of imposition of this fee is the funding of research that assesses and compares health outcomes, clinical effectiveness, and the risks and benefits of medical treatments. 

Employers with self-funded health plans are generally responsible for paying the PCORI fee. This includes Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs), unless they qualify as excepted benefits. If you administer a self-insured group health plan you are the plan sponsor and you must pay the PCORI fee directly. 

The fee is based on average number of lives covered under the plan during the plan year. There are three methods of calculating the same as per IRS approval:

1. Actual count method

2. Snapshot method

3. Form 5500 method

For plan years ending in 2024, the assessed rate is $3.22 per covered life. Be sure you use the correct rate according to when your plan year ends.

Employers are to report and pay the PCORI fee using **IRS Form 720** (Quarterly Federal Excise Tax Return); however, the PCORI fee is only due once a year (usually by **July 31** following the end of the plan year). Form 720 must be filed irrespective of whether other tax filings are expected by the employer. 

* Review all health plans that you offer to see if they fall under the PCORI.

* Use the IRS guidance to select the most favorable method of counting covered lives.

* Mark July 31 on your calendar for PCORI due date to avoid a penalty for late payment.

* Keep accurate records for seven years in the case of an audit.

* Work with your payroll provider or third-party administrator (TPA) if you need help with filing Form 720.

PCORI compliance is not just a regulatory checkbox but a key part of your on-going responsibilities as a health plan sponsor. Remaining vigilant and being proactive, employers will be able to timely, and accurately, meet their PCORI fee obligations.