New PCORI Fee for Plan Years Ending in 2018

Federal 

The IRS announced in Notice 2018-85 that the adjusted applicable amount for the Patient-Centered Outcomes Research Institute (PCORI) fee for policy or plan years ending on or after October 1, 2018, and before October 1, 2019, will be $2.45. The PCORI fee is calculated based on the average number of lives covered under the policy or plan.

The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of certain health insurance policies and plan sponsors of applicable self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute.

PCORI fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due each year by July 31 of the year following the last day of the plan year. This means that, for plan years ending in 2018, the PCORI fees are due by July 31, 2019. The IRS instructions for filing form 720, which were revised in April 2018, include information on reporting and paying the PCORI fees. Information about calculating the fee can be found on the IRS PCORI Overview page.

Employers who sponsor self-insured plans subject to the PCORI fee are responsible for completing the Form 720 filing. Current Paylocity clients with Health Reimbursement Arrangement (HRA) services through Paylocity should expect to receive an Average Covered Lives Report when the filing date nears.

Source: IRS Notice 2018-85

 Additional Resources:

IRS Form 720

IRS Form 720 Instructions

IRS PCORI Overview

IRS PCORI FAQs

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.