The Internal Revenue Service (IRS) has recently made a notable change that could have significant implications for corporations and their legal departments. The IRS has issued Notice 2023-70, a development that increases the Patient-Centered Outcomes Research Institute (PCORI) fee. According to a report published on JD Supra by the Groom Law Group, Chartered, the PCORI fee has been raised from $3 per covered life to $3.22 per covered life.
This change is specifically applicable for policy and plan years that conclude on or subsequent to October 1, 2023, and before October 1, 2024. With the increase in the PCORI fee, companies will need to review their compliance strategies and financial commitments in relation to this IRS policy.
For those unfamiliar, the Patient-Centered Outcomes Research Institute (PCORI) fee is a charge applied to health insurance policies and relevant self-insured health plans to fund the Institute’s research. This research focuses on assessing the relative health outcomes, clinical effectiveness, risks, and benefits of various medical treatments and services. However, it’s important to note that the PCORI fee does not apply to all kinds of health insurance policies and health plans. Specific rules and exceptions concerning the applicability of the PCORI fee can be reviewed in the IRS’ guidelines.
As health insurance and benefit plans are a significant aspect of employees’ compensation and can affect recruitment and retention, businesses must stay vigilant about such regulatory changes. Exceptional compliance with these changing regulations can not only mitigate potential legal repercussions but also contribute to maintaining employee trust and satisfaction.
While the increase may seem relatively small on an individual scale, for large corporations with substantial workforce this can result in a significant monetary change. Therefore, it might be beneficial for companies to consult with their internal legal department or external legal partners to fully understand the implications and plan accordingly.
It will be interesting to observe how various corporations respond to this change in the upcoming policy and plan years. Furthermore, the reactions and adaptability of private institutions could provide interesting insights into the larger dynamics of health care finance and corporate strategy.