The Affordable Care Act (ACA) created a research institute known as the Patient-Centered Outcomes Research Institute (PCORI). The goal of PCORI is to help patients and those who care for them make better-informed decisions about healthcare choices. PCORI is funded by fees charged to health plans.
The PCORI fee for policy or plan years after September 30, 2018, but before October 1, 2019, is $2.45, multiplied by the average number of lives covered under the policy or plan. PCORI fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due on July 31 of the year following the end of the plan year. This means that PCORI fees are due on July 31, 2020, for plan years that ended by or on September 30, 2019
Employers who sponsor self-insured plans subject to the PCORI fee are responsible for completing and filing the Form 720. Current TPSC clients should expect to receive an Average Covered Lives Report when the filing date nears.
PCORI fees were due to “sunset” in 2019 with the last payment due in 2020. The Consolidated Appropriations Act of 2020, signed into law on December 20, 2019, extends PCORI fees for the next ten years. Plans ending on or before September 30, 2029, will continue paying this fee with the last payment due on July 31, 2030. The amount due per covered life will continue to be adjusted annually.
On December 2, 2019, the IRS announced it would extend the deadline from Jan. 31 to March 2, 2020, for employers to prepare their 1095-B reporting form and to provide their employees with their 1095-C (from Jan. 31) or 1095-B, The IRS will not grant any additional extensions beyond the March 2 date.
Employers that report incomplete or inaccurate information may receive relief from applicable penalties if they can show a “good faith effort” was made to comply with the reporting requirement. Penalties for any missing or inaccurate information that is requested on the 1095-B or –C form, including taxpayer identification numbers and dates of birth, are eligible.
The critical 2020 filing deadlines for 2019 coverage are as follows:
ACA Requirement Deadline
1095 forms delivered to employees Jan 31
(extended to March 2)
Paper filing with IRS February 28
Electronic filing with IRS March 31
Employers and insurers are encouraged to provide the forms to individuals as soon as possible, but no later than March 2, 2020. Individuals who file their 2019 federal income tax returns before receiving their Forms 1095 are not required to amend their income tax returns once they receive their forms, but should retain their forms with their tax records.
Note: The IRS has not extended the due date for filing 2019 Forms 1094-B, 1095-B, 1094-C, or 1095-C with the IRS. The deadline remains February 28, 2020, for those with 250 or fewer forms filing by paper, or March 31, 2020, if filing electronically.
Read the IRS notice on reporting extensions
For more information about complying with these changes, please contact your Eligibility Account Administrator.
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