The “PCORI” Fee May Take Some Employers By Surprise.

Robbie MossCompliance / Regulations

Under the Affordable Care Act, some employers are set to face a July 31 deadline to pay a new fee. The fee, known as the PCORI (Patient-Centered Outcomes Research Institute) fee must be paid by employers who sponsor self-insured health plans, including health reimbursement arrangements and flexible spending arrangements.

Although the fee doesn’t amount to very much financially, it will add compliance and filing burdens, as well as the usual penalties for failure to file and failure to pay taxes to companies who may not be aware of the fee.

Below is a chart from the IRS summarizing which types of insurance coverage or arrangements are subject to the PCORI fee:

Type of insurance coverage or arrangement
Subject to PCORI fee?
Person responsible for paying and reporting the fee
Accident and health coverage or major medical insurance coverage Yes
  • The issuer if insured
  • Plan sponsor if self-insured
Retiree-only health or major medical coverage Yes
  • The issuer if insured
  • Plan sponsor if self-insured
Health or major medical coverage under multiple policies or plans Yes
  • Each issuer or plan sponsor
  • Special rules for coverage under multiple applicable self-insured health plans
COBRA coverage Yes
  • The issuer if insured
  • Plan sponsor if self-insured
Health Reimbursement Arrangement (HRA), including a premium-only HRA Yes, unless the arrangement satisfies the requirements for being treated as an excepted benefit
  • The plan sponsor
  • Special rules for coverage under multiple applicable self-insured health plans and special counting rules for HRAs
Flexible Spending Arrangement (FSA) Yes, unless arrangement satisfies requirements for being treated as excepted benefit
  • Plan sponsor
  • Special counting rules for FSAs
State & local government health or major medical plans for employees and/or retirees Yes
  • The issuer if insured
  • Plan sponsor if self-insured
Stand-alone dental or vision coverage No
Group insurance policy designed and issued specifically to cover primarily employees working and residing outside the U.S. No
Self-insured health plan designed specifically to cover primarily employees who are working/ residing outside the U.S. No
Medicare No
Medicaid No
Children’s Health Insurance Program (CHIP) No
Military health plans established by federal law to provide medical care (other than through insurance policies) to individuals (spouses or dependents) by reason of the individual being (or having been) a member of the Armed Forces of the U.S. No
Certain Indian tribal government health plans (programs established by federal law to provide medical care other than through insurance policies) No (Note: The IRS stated on July 16 that some tribal health plans may be subject to PCORI fees)
Health Savings Arrangements (HSAs) No
Archer Medical Savings Accounts (MSAs) No
Hospital indemnity or specified illness benefits No
Stop-loss or indemnity reinsurance No
Employee assistance programs, disease management programs, or wellness programs No, if the program doesn’t provide significant benefits in the nature of medical care or treatment
Accident-only coverage (including accidental death and dismemberment) No
Disability income coverage No
Automobile medical payment coverage No
Workers’ compensation or similar coverage No
On-site medical clinic No