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Do you oversee specific self-insured health plans as an employer or plan sponsor?  According to the IRS, one of the taxes you must pay annually if you oversee self-insured health plans is the Patient Centered Outcomes Research Institute (PCORI) fee.  In order to improve healthcare-related decision-making for both patients and healthcare professionals, this fee is required.  The issue is that without the proper direction, the PCORI charge calculation and payment process might be difficult.  To help you reach the IRS deadline without worrying, this guide breaks down the details in an easy-to-follow manner.

 

 

By verifying whether your institution is expected to pay the charge, you can perhaps determine the answer to the first step.  Employers are responsible for paying the PCORI charge, which is what the phrase "sponsoring of self-insured health plans or health reimbursement arrangements (HRAs)" actually means.  Typically, insurers are in charge of fully insured policies.  Employers who offer flexible spending plans or HRAs, however, may still be liable for something other than the insurer's liability.  Examine the specifics of your plan design, and if you're still unsure about compliance, speak with an expert in the industry.

 

 

Finding the average number of lives covered by the self-insured plan you operate over the plan year is the next step, in addition to understanding your duty.  The IRS provides three methods for doing a headcount: the Form 5500 approach, the actual count technique, and the snapshot method.  Selecting the most accurate and advantageous approach for your company is crucial.  This figure will be the primary input used to calculate the amount of the fee that must be paid.

 

 

The PCORI charge is reported and paid using IRS Form 720, also referred to as the Quarterly Federal Excise Tax Return.  However, it is crucial to remember that PCORI costs are often only paid once a year, typically on July 31st, when the second quarter report is due.  Provide the information based on the number of covered lives and the average applicable fee rate for that year in Part II of Form 720, IRS No. 133.  Before registering, remember to check the IRS's official website for the latest rate and filing year requirements.

 

 

The IRS, the person in charge of these transactions, must receive Form 720 and the payment as the final step.  The most conventional method is to send a check with the form, or you can use the Electronic Federal Tax Payment System (EFTPS) to send the money.  Take a screenshot or save a hard copy of your payment confirmation as evidence for potential audits once your file and payment have been successfully processed.  It is important to file on time because missing the PCORI deadline could result in penalties and interest.