Rebecca Acorn, CPA, MST •
Form 720 is used to report various excises taxes owed to the federal government on a quarterly basis. So why write about it now, has there been a change to the Environmental, communication or fuel taxes? No, it is Part II - Patient Centered Outcomes Research Fee (PCOR) that warrants this article.
Form 720 is used to report various excises taxes owed to the federal government on a quarterly basis. So why write about it now, has there been a change to the Environmental, communication or fuel taxes? No, it is Part II - Patient Centered Outcomes Research Fee (PCOR) that warrants this article.
This part of the form only needs to be completed for the second quarter. The due date is July 31of the year following the applicable self-health plan year end. If you only need to file Form 720 for this excise tax, do not fill out other sections. If you file Form 720 for other taxes, include the PCORPROCI information only on your second quarter filing.
Form 720 has been updated as of June 2024 to include the IRS No. 133 section as the rate per average covered life for plan years ending on or after October 31, 2023 and before October 1, 2024 of $3.22, up from $3.00. You can read Notice 2022-59 from the IRS here regarding the changes.
The issuer of a specified health insurance policy and the plan sponsor of an applicable self-insured health plan are responsible for paying the fee. Many companies use an insurance provider (Blue Cross, Aetna, Harvard Pilgrim) to provide accident, health insurance coverage or medical insurance coverage to their employees, as the cost of self-insurance can be very high. In these situations, the insurance company is responsible for paying the fee. The issuer may pass the cost of the fee down to the insured via increased premiums or charge per insured individual.
For Health Reimbursement Arrangement (HRA) and Flexible Spending Arrangements (FSA), the plan sponsor is responsible for paying the PCOR fee. Perhaps your company uses an insurer to provide health insurance to employees, but sponsors a separate FSA. As the plan sponsor to the FSA, you are responsible for paying the fee. The insurer is also responsible for paying the fee for the individuals it covers with health insurance. HRA and FSA plans that are under an applicable self-insured health plan, having same sponsor and plan year, may not count as two separate plans.
For more information on if an issuer or plan sponsor is responsible for the Patient-Centered Outcomes Research Trust Fund Fee, you can check this chart by the IRS or ask your insurance provider.
Form 720 has been updated as of June 2024 to include the IRS No. 133 section as the rate per average covered life for plan years ending on or after October 31, 2023 and before October 1, 2024 of $3.22, up from $3.00. You can read Notice 2022-59 from the IRS here regarding the changes.
The issuer of a specified health insurance policy and the plan sponsor of an applicable self-insured health plan are responsible for paying the fee. Many companies use an insurance provider (Blue Cross, Aetna, Harvard Pilgrim) to provide accident, health insurance coverage or medical insurance coverage to their employees, as the cost of self-insurance can be very high. In these situations, the insurance company is responsible for paying the fee. The issuer may pass the cost of the fee down to the insured via increased premiums or charge per insured individual.
For Health Reimbursement Arrangement (HRA) and Flexible Spending Arrangements (FSA), the plan sponsor is responsible for paying the PCOR fee. Perhaps your company uses an insurer to provide health insurance to employees, but sponsors a separate FSA. As the plan sponsor to the FSA, you are responsible for paying the fee. The insurer is also responsible for paying the fee for the individuals it covers with health insurance. HRA and FSA plans that are under an applicable self-insured health plan, having same sponsor and plan year, may not count as two separate plans.
For more information on if an issuer or plan sponsor is responsible for the Patient-Centered Outcomes Research Trust Fund Fee, you can check this chart by the IRS or ask your insurance provider.
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