PCORI was established as part of health care reform to conduct research to evaluate the effectiveness of medical treatments, procedures and strategies that treat, manage, diagnose or prevent illness or injury. PCORI fees were first due in July 2013 for plan years that ended on or after October 1, 2012. Under health care reform, most employer sponsors and insurers will be required to pay PCORI fees until 2019. The amount of PCORI fees due by employer sponsors and insurers is based upon the number of covered lives under each “applicable self-insured health plan” and “specified health insurance policy” (as defined by regulations) and the plan or policy year end date.
- The fee is payable by August 1, 2017 for any plan years ending in 2016.
The regulations provide 4 alternative methods for determining the number of covered lives for a given year.
- Actual Count Method: Add the total number of covered lives for each day of the first 9 months of the calendar year and divide that total by the number of days in those 9 months.
- Snapshot Count Method: Add the totals of lives covered on a date (or more dates if an equal number of dates are used for each quarter) during the same corresponding month in each of the first 3 quarters of the year (e.g., January, April, July) and divide that total by the number of dates on which a count was made.
- Snapshot Factor Method: Add the totals of lives covered on one date in each quarter, or an equal number of dates for each quarter, and divide the total by the number of dates on which a count was made. The number of lives covered on a date is the sum of (1) the number of participants with self-only coverage on that date, plus (2) the product of the number of participants with coverage other than self-only coverage on the date and 2.35. The plan must use the same months for each quarter (e.g., January, April, July, October).
- Form 5500 Method: For a plan providing only self-only coverage, treat the number of covered lives under the plan for a plan year as the sum of the total participants at the beginning and the end of the plan year, as reported on the plan’s Form 5500, divided by 2. For plans providing coverage that is not limited to the self-only coverage, add the number of participants reported for the beginning of the plan year to the number reported for the end of the plan year, as reported on the plan’s Form 5500.