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In any event, when it comes to federal compliance, it is critical for anyone employer-sponsored self-insured health coverage plans to understand IRS advice on the PCORI Fee. The PCORI fee was established under the Affordable Care Act to help fund needed research to improve health outcomes. Thus, an employer will be subjected to the PCORI filing fee unless certain exceptions apply, for example, an employer whose self-insured health plan or health reimbursement arrangement is subject to the fee under Form 720. Getting the correct guidelines from time to time will help the organization avoid errors and penalties associated with late or incorrect filings as well as penalties for late submission.

Employers offering self-funded group health plans—including retiree-only plans and most HRAs—may be responsible for the PCORI fee. By employers, this means any self-funded group health plan—including retiree-only plans and most HRAs—could trigger a filing obligation. The IRS has provided definitions and examples on what constitutes a "covered plan" to help HR professionals and benefits administrators assess liability. Fully-insured plans are normally the carrier's responsibility; however, dual arrangements may call for employer involvement as well.

As per IRS instructions, the PCORI fee is reported and paid annually using Form 720, the "Quarterly Federal Excise Tax Return." This implies payments of this fee are only required once a year, by the IRS. As to proper valuation, the calculation should be based on the actual count, snapshot, or Form 5500 method. Thus, every employer should fit the proper method of calculation into their compliance with all the IRS regulations.

Within any given year, the IRS should also provide updated guidelines for filing the PCORI fee. Updates may include changes to the fee rate or clarifications regarding eligible plans. For any errors during the filing and payment applicability, employers review the latest IRS PCORI fee notice or consult tax experts to be on the safe side.