In December 2019, the Further Consolidated Appropriations Act, 2020 was signed. Among many provisions was an extension of the tax used to fund the Patient-Centered Outcomes Research Institute.
As you may recall, the Patient-Centered Outcomes Research Fee was established as part of the Affordable Care Act (ACA) to fund research by a nonprofit institute into the effectiveness, efficiency, and quality of health care. The goal is that the results of this research will lead to lower costs in delivering health care and lower premiums for health care coverage. This tax was first applicable in 2013 and the final tax filings were scheduled for 2020. Under the ACA provision, PCOR fees were first collected in 2013 and were originally scheduled to be collected for plan years ending before October 1, 2019. The Act reinstates the PCOR provision for 10 more years and continues the fee requirements through plan years ending before October 1, 2029. Appropriations for research are extended through the government’s 2029 fiscal year.
PCOR fees arepaid by insurance carriers and employer sponsors of self-funded plans (which include HRAs). Below identifies who is responsible for filing the Form 720 and paying the fee:
The schedule for the filing is as follows with the new filing requirements in blue font:
This change will affect many Employee Benefits Corporation clients. For this year, all HRA plans ending during the calendar year 2019 will need to file and pay their PCOR fees by July 31, 2020. IRS Form 720 is used to pay this fee annually in July and generally is not updated until May for the 2nd quarter payments.
The IRS has not yet released the PCORI fee rate for plans ending in October 2019 – December 2019. This includes all calendar year plans. Employee Benefits Corporation will announce the new fee once it’s available.