PCORI Fees

Navigating the world of human resources can be challenging, especially when new terms and regulations are constantly being introduced. PCORI fees are just one example of the many terms that HR professionals need to understand in order to effectively do their jobs.

What are PCORI Fees?

PCORI stands for Patient-Centered Outcomes Research Institute. PCORI Fees are fees imposed by the Affordable Care Act (ACA) on certain health insurance policies and plan sponsors of self-insured health plans to help fund research that compares the effectiveness of different medical treatments.

Applicability

PCORI Fees are applicable to health insurance policies with policy years ending after September 30, 2012, and before October 1, 2019. Additionally, these fees also apply to self-insured health plans for plan years ending during that period.

Calculating PCORI Fees

The calculation of PCORI fees depends on the plan year end date. For fully insured health plans, the insurer is responsible for paying the fees, while for self-insured health plans, the plan sponsor is responsible. The fees are calculated based on the average number of covered lives under the policy or plan.

Filing and Payment

PCORI Fees are reported on IRS Form 720, which is due annually by July 31st of the calendar year following the last day of the policy or plan year. The fees must be paid through the Electronic Federal Tax Payment System (EFTPS) or by check or money order.

Usage of PCORI Fees

The funds collected through PCORI Fees are used to support comparative clinical effectiveness research, which helps inform healthcare decisions and improve patient outcomes. This research can lead to better-informed treatment choices, improved healthcare quality, and increased patient satisfaction.

Compliance and Enforcement

It is essential for HR professionals to ensure compliance with PCORI Fee requirements to avoid penalties and fines. Failure to pay the fees on time can result in financial consequences for the employer or plan sponsor. Therefore, staying informed about PCORI Fees regulations and deadlines is crucial for HR professionals managing health benefits within their organizations.

Conclusion

In conclusion, understanding PCORI fees is crucial for HR professionals as they are responsible for managing employee benefits and compliance with healthcare regulations. PCORI fees help fund research that evaluates and compares the effectiveness of different medical treatments, ultimately improving healthcare quality. By staying informed and ensuring timely payment of these fees, HR professionals can contribute to the overall well-being of their organization and its employees.