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PCORI Tax Reminder

The Patient-Centered Outcomes Research Institute (PCORI) tax is a fee imposed by the Affordable Care Act (ACA) on issuers and plan sponsors of individual and group health plans. Health Reimbursement Arrangements (HRAs) are considered self-insured plans under the ACA requirements, so employers with a HRA are considered “plan sponsors” and you are responsible for the fee, even though you may also have a fully insured health plan.

The fee is due July 31 of the calendar year that follows the plan year end date. For example, fees for plans that ended between January 1, 2019 and December 31, 2019 are due on July 31, 2020.

The tax is dependent upon the number of “covered lives,” and will vary by year:

  • For plans ending October 1, 2018 through September 30, 2019 the fee is $2.45 per covered life.
  • For plans ending October 1, 2019 through September 30, 2020 the fee is $2.54 per covered life.

For HRAs, each covered employee enrolled in a HRA counts as a covered life – dependents do not count.

The fees will be indexed each year and are tax deductible under IRS Tax Code Section 162(a). To report and pay the PCORI tax you must file form 720, the Quarterly Federal Excise Tax Return available on the IRS website.

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