Enter to open, tab to navigate, enter to select
PCOR Dollar Amount to Increase By 13 Cents, to $2.39
Practical Law Legal Update w-010-7992 (Approx. 4 pages)
PCOR Dollar Amount to Increase By 13 Cents, to $2.39
by Practical Law Employee Benefits & Executive Compensation
| Published on 10 Oct 2017 • USA (National/Federal) |
In Notice 2017-61, the Internal Revenue Service (IRS) announced the increased dollar amount for use in calculating patient-centered outcomes research (PCOR) fees, a requirement added under the Affordable Care Act (ACA). The increased amount applies for plan and policy years ending on or after October 1, 2017, and before October 1, 2018.
On October 6, 2017, the IRS announced the increased dollar amount for use in calculating patient-centered outcomes research (PCOR) fees under the Affordable Care Act (ACA) (IRS Notice 2017-61).
PCOR Fees
The ACA established the PCOR Institute, a private, nonprofit corporation to research the clinical effectiveness of medical treatments, procedures, and drugs. To finance this research, PCOR fees are imposed on:
- Insurers of health insurance policies, under Section 4375 of the Internal Revenue Code (26 U.S.C. § 4375).
- Plan sponsors of self-insured health plans (26 U.S.C. § 4376).
PCOR fees are assessed for the range of plan and policy years ending on or after October 1, 2012, and before October 1, 2019.
For insured arrangements, PCOR fees are calculated by multiplying the average number of individuals covered under the policy for the year by the applicable dollar amount for that year. For self-insured plans, PCOR fees paid by plan sponsors are calculated by multiplying:
- The average number of individuals covered under the plan for the plan year.
- The applicable dollar amount in effect on the last day of the plan year.
The applicable dollar amount is adjusted each year based on changes in the projected per capita amount of National Health Expenditures published by the Department of Health and Human Services (HHS).
For a discussion of calculating PCOR fees, see Practice Note, Patient-Centered Outcomes Research (PCOR) Fees Under the ACA: Calculating PCOR Fees for Insured Arrangements and Calculating PCOR Fees for Self-Insured Health Plans. For additional ACA resources, see Practice Note, Affordable Care Act (ACA) Overview and Affordable Care Act (ACA) Toolkit.
Dollar Amount To Increase By 13 Cents; Effective Date
Under Notice 2017-61, the applicable dollar amount for plan and policy years ending on or after October 1, 2017, and before October 1, 2018, will increase from $2.26 to $2.39. (The applicable dollar amount of $2.26 applied for plan and policy years ending on or after October 1, 2016, and before October 1, 2017.)
Notice 2017-61 is effective for plan and policy years ending on or after October 1, 2017.