Winston & Strawn LLP: Benefits Bulletin – IRS Increases PCORI Fees Due in 2024 – Insurance Laws & Products

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In Internal Revenue Service (IRS) Notice 2023-70, the IRS issued the Patient-Centered Outcomes Research Institute (PCORI) fee under the new Affordable Care Act (ACA) for policy and plan years ending on or after Oct. 1, 2023, and before Oct. 1, 2024. The new PCORI fee for policy and plan years ending on or after October 1, 2023 and before October 1, 2024 is $3.22; an increase of $0.22 per covered life compared to the PCORI fee established on or after October 1, 2022 and before October 1, 2023.

PCORI was established under the ACA to conduct research to evaluate and compare the clinical effectiveness, risks, and benefits of medical treatments, services, procedures, drugs, or other items or strategies that treat, manage, diagnose, or prevent disease or injury. The PCORI fee is assessed to health insurance issuers and sponsors of self-insured health plans. Fees are calculated using the average number of lives covered by the policy or plan and the applicable dollar amount for that policy or plan year. Self-insured plan sponsors should use IRS Form 720 (Quarterly Federal Excise Tax Return) for the second quarter of the calendar year to report and pay the PCORI fee. Health insurance issuers are responsible for paying the PCORI fee for insured plans.

Tea IRS website provides additional details regarding the PCORI fee, including how the fee is calculated and the fee reporting and payment process.

Winston Takeaway – Employers and insurers will need to calculate the fee, file IRS Form 720, and pay the 2023 PCORI fee by July 31, 2024.

The content of this article is intended to provide a general guide to the issue. Professional advice should be sought regarding your particular situation.

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