Are PCORI Fees Still Required for Self-Insured Health Plans in 2025? Everything You Need to Know

Are PCORI Fees Still Required for Self-Insured Health Plans in 2025? Everything You Need to Know

by | Apr 10, 2025 | Blog

If your company sponsors a self-insured health plan, you might be wondering whether you still need to pay Patient-Centered Outcomes Research Institute (PCORI) fees. These fees, which fund research on patient-centered outcomes, have been a requirement for several years. However, there have been changes to the legislation that you should be aware of. In this post, we’ll clarify the current requirements for PCORI fees and what you need to do to stay compliant.

What Are PCORI Fees?

PCORI fees are paid by health insurers and sponsors of self-insured health plans. The funds collected are used to support research that helps patients, clinicians, purchasers, and policymakers make informed health decisions.

Legislative Background

Initially, PCORI fees were required for plan and policy years ending before October 1, 2019. For calendar-year plans, this meant that the 2018 plan year was supposed to be the last year for which these fees applied. However, budget legislation passed in 2019 reinstated the PCORI provision, extending the fee requirements through plan years ending before October 1, 2029.

Current Requirements

As of now, if your self-insured health plan’s policy year ends on December 31, 2024, you are required to pay the PCORI fee. This fee is considered an excise tax under the Internal Revenue Code and must be reported on IRS Form 720. Although Form 720 is filed quarterly for other federal excise taxes, the PCORI fee reporting and payment are only required annually. The deadline for filing Form 720 for the 2024 plan year is July 31, 2025.

Record-Keeping

The instructions for Form 720 advise taxpayers to keep their tax returns, records, and supporting documentation for at least four years from the latest of the date the tax became due or the date the tax was paid. This is crucial for ensuring compliance and being prepared for any potential audits.

Conclusion

In summary, PCORI fees are still required for self-insured health plans through plan years ending before October 1, 2029. Make sure to file IRS Form 720 by July 31, 2025, for the 2024 plan year, and keep all related documentation for at least four years. Staying informed and compliant will help your company avoid any penalties and contribute to valuable health outcomes research.

Source: Thomson Reuters

Are PCORI Fees Still Required for Self-Insured Health Plans in 2025? Everything You Need to Know

IRS Sets 2025 PCORI Fee Amounts

by | Dec 5, 2024 | Blog

The IRS has released the 2025 Patient-Centered Outcomes Research (PCORI) fee amounts for health insurers and self-insured health plan sponsors. The PCORI fee is due on July 31, 2025. For plan and policy years ending between October 1, 2024, and October 1, 2025, the PCORI fee is $3.47 per covered life, up from $3.22 for the previous year. This is a $.25 increase from the amount in effect for plan and policy years ending on or after October 1, 2023, and before October 1, 2024.

PCORI fees are calculated by multiplying the applicable dollar amount for the year by the plans or policy’s average number of covered lives. These fees, established by the Affordable Care Act (ACA), fund clinical effectiveness research.

Below is the fee amount per plan year.

For more information on the upcoming PCORI fee deadline please refer to the IRS’ PCORI fee FAQ

Are PCORI Fees Still Required for Self-Insured Health Plans in 2025? Everything You Need to Know

Are PCOR Fees Plan Expenses?

by | Jan 11, 2024 | Blog

QUESTION: Our company sponsors a calendar-year self-insured major medical plan subject to ERISA. Are we permitted to treat Patient-Centered Outcomes Research (PCOR) fees as plan expenses?

ANSWER: The DOL has indicated that PCOR fees generally are not permissible plan expenses under ERISA since they are imposed on the plan sponsor and not the plan. As background, PCOR fees, which are used to fund research on patient-centered outcomes, are payable annually by sponsors of self-insured plans (and insurers, but we focus here on plan sponsors) through plan years ending before October 1, 2029. By statute, the fee for a self-insured plan is to be paid by the “plan sponsor,” which in most cases means the employer or employee organization that established or maintains the plan.

This means that plan assets (e.g., trust assets or participant contributions) should not be used to pay PCOR fees since ERISA’s prohibited transaction rules prohibit plan assets from being used to offset employer obligations. However, multiemployer plan assets may be used to pay PCOR fees since the plan sponsor liable for a multiemployer plan’s fee is generally an independent joint board of trustees with no source of funding other than plan assets.

Source: Thomson Reuters