The Affordable Care Act’s 2018 PCORI Fees

The Affordable Care Act (ACA) imposes a fee on health insurers and plan sponsors of self-insured group health plans to help fund the Patient-Centered Outcomes Research Institute (PCORI). Specifically, the PCORI fee assists in funding research that evaluates and compares health outcomes, clinical effectiveness, and the risks and benefits of medical treatments and services.

The PCORI fee was first assessed for plan years ending after September 30, 2012. The fee for the first plan year was $1 per covered life, increasing to $2 per covered life in the second year, and then indexed in subsequent years based on the increase in national health expenditures. Plan sponsors must pay the PCORI fee by July 31 of the calendar year immediately following the calendar year in which the plan year ends. All plan sponsors of self-insured group health plans will pay the PCORI fee in 2018, but the amount of the fee paid will vary depending on when the plan year ends. The PCORI fees are as follows:

For plan years:

  • Ending on or after Oct 1, 2012 and before Oct 1, 2013: $1.00 per covered life
  • Ending on or after Oct 1, 2013 and before Oct 1, 2014: $2.00 per covered life
  • Ending on or after Oct 1, 2014 and before Oct 1, 2015: $2.08 per covered life
  • Ending on or after Oct 1, 2015 and before Oct 1, 2016: $2.17 per covered life
  • Ending on or after Oct 1, 2016 and before Oct 1, 2017: $2.26 per covered life
  • Ending on or after Oct 1, 2017 and before Oct 1, 2018: $2.39 per covered life

Employers must complete and file Form 720 for the second calendar quarter to report and pay the PCORI fee by July 31, 2018. If your medical plan year ended in 2017, your Form 720 is due by July 31, 2018.

The Form 720 and instructions are available on the IRS website:

www.irs.gov/pub/irs-pdf/f720.pdf

www.irs.gov/pub/irs-pdf/i720.pdf

The PCORI fee will not be assessed for plan years ending after September 30, 2019. Therefore, the last year for assessment will be the 2018 calendar year.