The Internal Revenue Service (IRS) released Notice 2023-70, which establishes the applicable dollar amount for policy and plan years ending on or after Oct. 1, 2023, and before Oct. 1, 2024, in relation to the Patient-Centered Outcomes Research Institute (PCORI) fee established under the Affordable Care Act (ACA).
The Details:
The ACA created a nonprofit corporation, PCORI, to support clinical effectiveness research. This entity is to be funded in part by fees paid by certain health insurers and applicable sponsors of self-insured health plans. The goal of PCORI is to assist patients, clinicians, purchasers, and policymakers in making informed health decisions by “advancing the quality and relevance of evidence-based medicine through the synthesis and dissemination of comparative clinical effectiveness research findings.” The fee imposed on an insurer is based on the average number of lives covered under the policy and the fee imposed on a plan sponsor of a self-insured health plan is based on the average number of lives covered under the plan.
For policy years and plan years ending on or after Oct. 1, 2023, and before October 1, 2024, the adjusted applicable dollar amount is $3.22 per person. This is a 22-cent increase from the $3.00 amount in effect for plan and policy years ending on or after Oct. 1, 2022, and before Oct. 1, 2023.
Fully insured plans are to be assessed the applicable PCORI fee amount through their monthly premium payments made to their health insurance carrier. Self-insured plans pay this fee as part of the annual IRS Form 720 filing due by July 31 of each year.
The PCORI fee will increase for each year based on the percentage increase in the projected per capita amount of National Health Expenditures.
For a copy of Notice 2023-70 please click on the link provided below.
https://www.irs.gov/pub/irs-drop/n-23-70.pdf
Next Steps:
Employers of self-insured plans and carriers of insured plans must submit the required fee along with IRS Form 720 by the July 31st for the plan year ending prior to Oct. 1st of the previous year.
Have Questions?
Please contact your dedicated service professional with any questions.