2021 Patient-Centered Outcomes
Research Trust Fund ("PCORTF") Fees

April 7, 2021

As a reminder that the annual Patient-Centered Outcomes Research Trust Fund (“PCORTF”) fees are due by July 31, 2021. At the end of 2019, the Federal Government reauthorized the annual payment of fees by health insurers and group health plans into the PCORTF until 2029. PCORTF fees were previously set to expire for plan years ending on or after October 1, 2018 and before October 1, 2019, and beyond. The fee is due by July 31 of the calendar year immediately following the last day of the plan year in which the applicable plan ended. The PCORTF fees fund the Patient Centered Outcome Research Institute (PCORI), which was established by Congress through the Affordable Care Act in 2010.

For plan years ending on or after October 1, 2019, and before October 1, 2020, the fee is $2.54 multiplied by the average number of lives (employees and dependents) covered under the plan for the plan year. However, for plan years ending on or after October 1, 2020 and before October 1, 2021, the fee is $2.66 multiplied by the average number of lives (employees and dependents) covered under the plan for the plan year.

For ease of reference, the following chart outlines the applicable fees that must be paid in 2021 and 2022 based on the plan year start dates:

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Please note that the IRS has not yet released the applicable Form 720 (Quarterly Federal Excise Tax Return), which is the form used by plan sponsors of group health plans to report and pay the annual PCORTF fee. Below are the links to the prior Form 720 and corresponding instructions:

The Snapshot Count Method: The snapshot count method is the most suitable approach to use in determining the average number of medical lives during the applicable plan year. In order to determine the average number of medical lives, please take the following steps:

  1. Run 4 different census reports, one for each of the last 4 quarters on the same date (i.e., the first of the month, the fifteenth of the month, etc.) that show total number of covered medical lives.
  2. Add up the total number of covered lives from each of these reports, and divide that number by 4 to determine the total number of average lives that should be listed on Form 720.
  3. List that number in the applicable box on form 720 and multiply that number by the per employee fee applicable to you based on your renewal month.

Please note, and as discussed above, plan sponsors must pay the annual PCTORF fee via the Form 720 by July 31, 2021. For any further questions, please contact your Benefit Specialist.