As a reminder, the deadline for submitting Patient-Centered Outcomes Research Institute (PCORI) fees is July 31. Employers that sponsor self-insured group health plans should report and pay PCORI fees using the most recently revised IRS Form 720, Quarterly Federal Excise Tax Return.

Insurance carriers are responsible for paying the PCORI fee on behalf of a fully-insured plan, but employers must pay the fee for any self-insured medical benefits, including general purpose health flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs). For plans that offer a mix of fully-insured and self-insured benefits, both the insurer and the employer must pay fees.

The fee due depends on the date your most recent plan year ended:

• For plan years that ended between January 1, 2022, and September 30, 2022, the fee is $2.79 per covered life.
• For plan years that ended between October 1, 2022, and December 31, 2022, the fee is $3.00 per covered life.

The IRS allows plan sponsors to choose one of three alternative methods to determine the average number of covered lives for the year:

• Actual count method, which is the total number of lives covered on each day of the plan year divided by the total number of days in the plan year.
• Snapshot method, which averages the total number of lives covered on select dates each quarter. Employers can either use the total number of lives covered on each date or a factored method that on each date uses the number of participants with self-only coverage plus 2.35 times the number of participants with any other coverage.
• Form 5500 method, which is based on the number of participants reported on the Form 5500. For plans with self-only coverage, an employer must add the total number of participants at the beginning and end of the plan year and divide by two. For plans with self-only and dependent coverage, employers must add the total number of participants at the beginning and end of the plan year, without dividing.

In determining the number of covered lives, you must count anyone covered under your self-insured medical programs, including former employees and their dependents who participate under COBRA or other post-employment coverage. You can treat all self-insured benefits as a single plan. Also, employers can treat health FSAs and HRAs as providing self-only coverage.