CLASSIC VALUES, INNOVATIVE ADVICE.
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Reminder: PCORI Fee Due July 31

The PCORI fee is now due for plan years ending in 2018. For plans with plan years ending in October, November, and December 2018, the PCORI fee due July 31, 2019, will be the final payment. Plans with plan years ending in the months of January through September 2019 will make their final PCORI fee payment in 2020.

Action Needed Now: Sponsors of plans subject to the PCORI fee need to determine the average number of covered lives and file IRS Form 720 by July 31, 2019, along with payment of the required fee.

PCORI Fee Amount: The PCORI fee is imposed by Sections 4375 and 4376 of the Internal Revenue Code, which were added by the Affordable Care Act. The fee is reported on the second quarter Form 720. The payment amount is calculated by multiplying the "applicable dollar amount" by the "average number of covered lives" for the plan year. For policy years and plan years that end on or after October 1, 2018 and before October 1, 2019, the applicable dollar amount is $2.45.

Plan Year Ending in the Months of:

Applicable Rate:

October 2017 through September 2018

$2.39

October 2018 through September 2019

$2.45

Plan sponsors can use the actual count method, the snapshot method, or the Form 5500 method to determine the average number of lives covered during a plan year. Calendar year sponsors that elect to use the Form 5500 method for counting lives must file their appropriate 2018 Form 5500 by July 31, 2019.

Additional Information

For additional information, please see the following:

  • A copy of the final regulations is at this link.
  • A copy of the IRS form 720 is at this link.

CHEIRON OBSERVATIONS: Plan sponsors should determine which method of counting covered lives is most advantageous.

Cheiron health consultants can assist with your determination of covered lives and calculation of the PCORI fee due for 2018.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.

 
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