IRS Updates PCORTF Fees, Payable in 2020

For plan years ending on or after 10/1/2019 and before 10/1/2020 (the 2019 plan year for calendar year plans), PCORTF fees will be $2.54 multiplied by the average number of covered lives.

In IRS Notice 2020-44, the IRS announced that for plan years ending on or after October 1, 2019 and before October 1, 2020 (i.e., the 2019 plan year for calendar year plans), Patient-Centered Outcomes Research Trust Fund (PCORTF) fees will be $2.54 multiplied by the average number of covered lives.

Previously, the fees were:

  • $2.45 × average number of covered lives for the 2018 plan year
  • $2.39 × average number of covered lives for the 2017 plan year
  • $2.26 × average number of covered lives for the 2016 plan year
  • $2.17 × average number of covered lives for the 2015 plan year
  • $2.08 × average number of covered lives for the 2014 plan year
  • $2.00 × average number of covered lives for the 2013 plan year
  • $1.00 × average number of covered lives for the 2012 plan year

Under the ACA, self-insured health plan sponsors and health insurers must pay PCORTF fees for plan or policy years ending on or after October 1, 2012 and before October 1, 2019 (2012 - 2018 for calendar year plans). Later legislation extended these fees through 2029. The fees, along with payments from the Medicare program, help fund the Patient-Centered Outcomes Research Institute (PCORI), which funds comparative clinical effectiveness research.

The IRS notes that some group health plans may not have anticipated the need to calculate the average number of covered lives for the 2019 plan year. Therefore, for the 2019 plan year only, group health plans can use any reasonable method to perform the calculation, provided the method is applied consistently for the entire year. Group health plans can use IRS Form 720 for fee filing, consistent with prior years.

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