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IRS Announces Annual PCOR Fee Adjustment

EBIA  

EBIA  

IRS Notice 2018-85 (Nov. 5, 2018)

Available at https://www.irs.gov/pub/irs-drop/n-18-85.pdf

The IRS has announced the annual increase in Patient-Centered Outcomes Research (PCOR) fees paid by health insurers and sponsors of self-insured health plans. The adjusted applicable dollar amount for PCOR fees for plan and policy years ending on or after October 1, 2018, and before October 1, 2019, is $2.45. This is a $.06 increase from the amount in effect for plan and policy years ending on or after October 1, 2017, and before October 1, 2018 (see our Checkpoint article). PCOR fees are calculated by multiplying the applicable dollar amount for the year by the plan or policy’s average number of covered lives. IRS Form 720 is used for purposes of PCOR fee reporting and payment (see our Checkpoint article).

EBIA Comment: PCOR fees, which are used to fund research on patient-centered outcomes, apply to plan and policy years ending before October 1, 2019. Accordingly, it can be expected that this is the final annual adjustment. For calendar-year plans and policies, the 2018 plan or policy year is the last year for which PCOR fees apply. The IRS website has a helpful chart on the application of PCOR fees to common types of health coverage arrangements. For more information, see EBIA’s Health Care Reform manual at Section XXXVI.H (“Patient-Centered Outcomes Research (PCOR) Fees”). See also EBIA’s Self-Insured Health Plans manual at Section VI.H (“Additional Taxes Under Health Care Reform”).

Contributing Editors: EBIA Staff.

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