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The act of remitting the Patient-centred Outcomes Research Institute (PCORI) fee is a yearly commitment that is not to be ignored by employers and plan sponsors for applicable self-insured health plans. This fee helps in the financing of research to improve the healthcare sector, and in turn, this annual fee is considered a tax obligation reported to the IRS. Knowing the process and the time limit of how to pay the PCORI fee is vital since the consequence of not doing so is that the IRS may issue financial penalties to the defaulters.

The foremost thing to do is find out if your institution is responsible for making the payment of the PCORI fee. Generally speaking, this fee applies to issuers of certain health insurance policies and the sponsors of specified self-insured health plans, including health reimbursement arrangements (HRAs). If you are not sure whether or not your health plan has ended in the past calendar year, you should follow up on the IRS instructions to find out whether your plan is still under the current PCORI fee requirements or not.

After that, calculate the correct fee amount based on the average lives covered during the plan year under your health plan. The quantity of the fee varies according to the date the plan year was estimated to end. For instance, the average rate set by the IRS at the time a plan is terminated between October 1, 2023, and September 30, 2024, would be the current applicable rate. You are given three options among which you can select the one that suits you the best and is also approved by the IRS (actual count, snapshot, or Form 5500) for the determination of the average number of lives covered under the plan. 

In order to meet the obligation of the PCORI fee, one has to fill out the IRS Form 720, and the second quarter form that fulfils this is due on July 31 of every year. Insert the fee amount on the "Patient-centred Outcomes Research Fee" line in Part II of Form 720. The form can be submitted either electronically or by regular postal service. Furthermore, be aware of and include the correct payment using EFTPS or a check, depending on your filing method.  Submit the form on time and ensure accuracy to remain in compliance with federal regulations, and you are still in compliance.