PCORI Fee Announced for 2021

The Affordable Care Act (ACA) imposes a fee on health insurance issuers and self-insured plan sponsors in order to fund comparative effectiveness research. These fees are widely known as Patient-Centered Outcomes Research Institute (PCORI) fees and were originally scheduled to expire for plan or policy years ending on or after October 1, 2019. However, a federal spending bill enacted at the end of 2019 extended the PCORI fees for an additional ten years.

As a result, the Internal Revenue Service (IRS) issued Notice 2020-84 to increase the PCORI fee amount for plan years ending on or after October 1, 2020, and before October 1, 2021, to $2.66 multiplied by the average number of lives covered under the plan.

Form 720

PCORI fees are reported and paid annually on IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due each year by July 31 of the year following the last day of the plan year. For plans ending in 2020, the next PCORI fee payment will be due August 2, 2021, since July 31, 2021, is a Saturday. Covered employers should have reported and paid PCORI fees for 2019 by July 31, 2020.