It’s that time of year again; the annual Patient- Centered Outcomes Research Institute (PCORI) funding fee is due by the end of July. For self-funded plans, the self-insured employer/plan sponsor is responsible for submitting the fee and accompanying paperwork to the IRS. Employers subject to the fee must submit it by July 31st of the year following the last day of the plan year. For the coming year, self- insured health plan sponsors should use Form 720 for the second calendar quarter to report and pay the PCORI fee by July 31, 2022.
Although the fee is paid annually, employers should indicate on the Payment Voucher (720-V) — located at the end of Form 720 — that the tax period for the fee is the 2nd Quarter. Failure to properly designate ‘2nd Quarter’ on the voucher can result in the IRS’s software generating a tardy filing notice.
Fully-insured plan sponsors require the carrier to file Form 720 and remit fees to the IRS on behalf of the plan.
There are specific rules for “Special Arrangements” such as HSA or HRA accounts. An HRA is not subject to a separate PCORI fee if the plan sponsor also maintains a separate applicable self-insured health plan within the same plan year. In such circumstance, the plan sponsor is permitted to treat the HRA and the other plan as a single applicable self-insured health plan and pay the PCORI fee once, with respect to each life covered under the HRA and other plan.
However, the regulation does not permit a plan sponsor to treat the HRA and fully insured plan as a single plan, for purposes of the fee. An HSA is generally not considered a plan sponsored by an employer, so should not be considered an applicable self-insured health plan that is subject to the fee. However, high-deductible health plans are subject to the fee.
Note: the regulations provide a special rule which permits a plan sponsor to assume one covered life for each employee with an HRA and for each
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