IRS Announces 13 Cent Increase in 2021-2022 PCORI Fee

The IRS has issued Notice 2022-4 which sets forth the applicable dollar amount for the Patient-Centered Outcomes Research Institute (PCORI) fee for policy years and plan years ending on or after October 1, 2021 and before October 1, 2022.

The PCORI fee is imposed by Sections 4375 and 4376 of the Internal Revenue Code, which were added by the Affordable Care Act and extended to 2029 by the Consolidated Appropriations Act, 2020. The fee is reported on the second quarter Form 720, due by August 1, 2022 (since July 31 is a Sunday).

PCORI Fee Amount: The payment amount is calculated by multiplying the "applicable dollar amount" by the "average number of covered lives" for the plan year. The “applicable dollar amount” is adjusted to reflect inflation in National Health Expenditures, as determined by the Secretary of Health and Human Services. The fee is reported only once a year on the second quarter Form 720. The following chart reflects the respective applicable dollar amounts for policy years and plan years that end on or after from October 1, 2020, and before through October 1, 2022:

Plan Year Ending
in the Months of:
Applicable Rate:

October 2020 through September 2021


October 2021 through September 2022



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 2021 Form 5500 by August 1, 2022. Our alerts as of July 6, 2016, and July 2, 2013, provide additional information about counting lives.

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 2021.

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.