Health Care Reform Update - Patient-Centered Outcomes Research Institute Fee: Filing Reminder

1. - 1 -
Willis Human Capital Practice, National Legal & Research Group
The health care reform law includes a provision that promotes research to evaluate and compare
health outcomes and the clinical effectiveness, risks and benefits of medical treatments, services,
procedures, drugs and other strategies that treat, manage, diagnose or prevent illness or injury. The
Patient-Centered Outcomes Research Institute (PCORI) was created to promote this research. The
funding source for the Institute is a trust financed by fees paid by health insurers and sponsors of
self-insured health plans. The filing deadline for the PCORI fee, also known as the Comparative
Effectiveness Research or CER fee, is July 31, 2015.
For details on the calculation and applicability of the PCORI fee, see Willis Human Capital Practice
Alert, February 2013, “IRS Issues Final Regulations for Comparative Effectiveness Research Fees.”
Questions and answers about the fee and a chart that outlines which types of plans are subject to the
fee are also available on the IRS’ website.
Filing Form and Deadlines
Responsibility for calculating and paying the PCORI fee lies with the health insurer for a fully
insured plan and with the plan sponsor for a self-insured plan (employers that do not provide any
self-insured coverage do not have filing responsibilities). Plan sponsors of self-insured plans will pay
and report the PCORI fee (final regulations confirm that third parties are not permitted to report or
pay the fee on behalf of plan sponsors) on Form 720, “Quarterly Federal Excise Tax Return.”
Although it is called a “quarterly” return, Form 720 for PCORI fee purposes (the Form is used to
report a variety of different excise taxes) is only filed once a year. A copy of Form 720 and
instructions on how to complete and file it can be found on the IRS’ website.
Plan sponsors must report and pay the fee for a plan year by July 31 of the calendar year immediately
following the last day of the plan year. For plan years ending before October 1, 2014 the PCORI fee
is $2 multiplied by the average number of lives covered under the plan. For plan years ending on or
after October 1, 2014, the fee is increased to $2.08 multiplied by the average number of lives covered
under the plan.
This information is not intended to represent legal or tax advice and has been prepared solely for informational
purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this publication.
WEEK OF JUNE 8, 2015:
Health Care Reform Update - Patient-Centered Outcomes
Research Institute Fee: Filing Reminder