IRS Releases PCORI Fees for Health Insurance Policy

The IRS has issued Notice 2022-04, providing the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of calculating the fee imposed by Internal Revenue Code Sections 4375 and 4376, for health insurance policy years and plan years that end on or after October 1, 2021, and before October 1, 2022.

The Affordable Care Act imposes a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans, to help fund the Patient-Centered Outcomes Research Institute (PCORI). This fee, also known as the PCORI fee, is calculated using the average number of lives covered under the policy or plan and the applicable dollar amount for that policy year or plan year. Notice 2020-84 provided that the adjusted applicable dollar amount for policy years and plan years that ended on or after October 1, 2020, and before October 1, 2021, is $2.66. Notice 2022-04 provides that the adjusted applicable dollar amount for policy years and plan years that end on or after October 1, 2021, and before October 1, 2022, is $2.79.

The PCORI fee is filed using Form 720. Although Form 720 is a quarterly return, PCORI Form 720 is filed annually only, by July 31. Plan sponsors should apply the applicable PCORI fees and file Form 720 corresponding to policy or plan years ending from January 1, 2021, to December 31, 2021, by July 31, 2022.