IRS Increases PCORI Fee Amount

Author: Gloria Ju

September 19, 2014

On September 18, the Internal Revenue Service (IRS) announced in Notice 2014-56 that the adjusted applicable dollar amount for the Patient-Centered Outcomes Research Institute (PCORI) fee will increase to $2.08 for plan or policy years ending on or after October 1, 2014, and before October 1, 2015. The IRS also noted that it will publish the adjusted applicable dollar amount in a future Internal Revenue Bulletin (IRB) for plan/policy years that end on or after October 1, 2015, and before October 1, 2019. Notice 2014-56 will appear in IRB 2014-41, which will be published October 6.

Employers that sponsor self-insured plans and health insurance issuers must pay the fee to help finance PCORI, which was established by the Affordable Care Act. The fee is calculated by using the average number of lives covered under the plan/policy and the applicable dollar amount for that plan/policy year. The applicable dollar amount is increased based on the percentage increase in the projected per capita amount of National Health Expenditures most recently released by the Department of Health and Human Services (HHS) before the beginning of the federal fiscal year. The HHS published the most recent percentage increase on September 3. The fee for plan years ending on or after October 1, 2013, and before October 1, 2014, is $2.

Employers subject to the fee must submit it by July 31 of the year immediately following the last day of the plan/policy year.

PCORI's mission is to help individuals make informed health care decisions and improve health care delivery and outcomes "by producing and promoting high-integrity, evidence-based information that comes from research guided by patients, caregivers and the broader health care community." According to PCORI, it identifies critical research questions, funds patient-centered comparative clinical effectiveness research and disseminates the results in useful and valuable ways in order to "close the gaps in evidence needed to improve key health outcomes."