The PCORI fee is due July 31 for plan years ending in 2023.  In Notice 2023-70, the IRS updated the fee amount.

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, 2024, 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, 2023 and before October 1, 2024, the applicable dollar amount is $3.22.

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 2023 Form 5500 by July 31, 2024. 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 2023. 

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.