The Internal Revenue Service (IRS) has recently issued Notice 2023-70, a crucial document for legal professionals working in compliance departments, particularly those involved in corporate healthcare plans. The notice establishes the upcoming Patient-Centered Outcomes Research Institute (PCORI) fee.
The PCORI fee will apply to plan years ending between October 1, 2023 and September 30, 2024, and is set at $3.22 per covered life. This fee is part of the US government’s efforts to fund research that will assist patients, clinicians, purchasers, and policy makers in making informed health decisions. Specifically, the fee is designed to finance comparative clinical effectiveness research.
The unique feature of the PCORI fee, as opposed to other types of healthcare-related costs, is that it is temporary. The PCORI was initially established by the Affordable Care Act and then further extended by the Further Consolidated Appropriations Act, 2020. Although the fee is anticipated to cease after the 2029 fiscal year, it remains an essential consideration for compliance professionals aiding in the implementation and maintenance of healthcare plans and programs.
- The fee applies to issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans. However, there are some exceptions including certain government programs, employee assistance plans, and plans primarily designed for overseas employments, among others.
- Entities responsible for paying the fee are expected to annually file Form 720, where the due date is July 31 of the year immediately following the last day of the policy or plan year.
It’s crucial for legal professionals to keep updated on these yearly notices to ensure that all compliance matters related to healthcare programs are appropriately managed. A failure to timely respond to such compliance issues can result in serious penalties for corporations and law firms alike.