ACA Compliance: PCORI Fees Due July 31, 2022

Three years ago, the Senate voted and the House approved, reauthorizing annual payment through 2029 for the Patient-Centered Outcomes Research Institute (PCORI) fees by health insurers and group health plans to fund the Patient-Centered Outcomes Research Trust Fund (PCORTF).

The plans subject to PCORI fees (sometimes referred as Comparative Effectiveness Research Fees, or CERF for short) include plan sponsors of self-insured medical plans only that provide health or accident benefits primarily to individuals living in the United States. Plans subject to the fee include major medical (including retiree-only and COBRA), level-funded plans, Health Reimbursement Accounts (HRAs) that are not integrated with an underlying self-insured medical plan, as well as Minimum Essential Coverage (MEC) plans that provide more than excepted benefits. Note, an HRA is not required to pay the fee for individuals who are covered under both an HRA and a self-insured major medical group plan with the same plan year. Most FSA health plans and Employee Assistance Programs (EAP) are not subject to the fee provided they do not provide significant benefits in the nature of medical care or treatment.


Clients that have a Level Funded/Self Funded plan through United Healthcare All Savers can download their PCORI report via their All Savers client portal. AllState clients will receive a communication directly from the carrier.

Clients that have a Level Funded/Self Funded plan through United Healthcare All Savers can download their PCORI report via their All Savers client portal. AllState clients will receive a communication directly from the carrier.

Reporting is required once a year and the amount of the PCORI fee is equal to the average number of lives covered during the policy year, or plan year, multiplied by $2.79. Self-insured plans must pay the fee via Form 720 to the IRS. If your company’s medical plan ended in 2019, then Form 720 is due by July 31, 2022. (The fee is due July 31 of the calendar year immediately following the last day of the plan year in which the application plan ended.) For plan years that ended on or after October 1, 2018 and before October 1, 2019, the fee is $2.66 multiplied by the average number of lives. This count should include lives of employees and their dependents covered for the plan year.

There are four different methods that can be used for calculating the average number of lives covered under the policy: 

  • The actual count method: Plan sponsors add the total of lives covered for each day of the year, divided by the total number of days in the plan year.
  • The snapshot method: Sponsors add the total lives covered on one date in each quarter of the plan year.
  • The snapshot factor method: Similar to the snapshot method, the number of lives covered on any one day may be determined by counting the actual number of lives covered on that day or by treating those with self-only coverage as one life and those with coverage other than self-only as 2.35 lives.
  • The Form 5500 method: Plan sponsors use a formula that includes the number of participants reported on their Form 5500 for the plan year.

Form 720 can be accessed by going to: https://www.irs.gov/pub/irs-pdf/f720.pdf

More information on the Patient-Centered Outcomes Research Trust Fund Fee can be found on the following website: https://www.irs.gov/affordable-care-act/patient-centered-outcomes-research-trust-fund-fee-questions-and-answers

Should you have questions or if you would like to discuss with Blue Chip Benefits, please reach out to us at Team@BlueChipBG.com or call Maureen de Jongh at (888) 225-8244, X701. We are here to support you!

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Blue Chip Benefits is a full-service insurance agency that provides organizations, as well as key executives, with insurance solutions that support an organization’s overall benefits strategy and bottom line.

This update is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. Copyright © 2022 Blue Chip Benefits. All right reserved.

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