1. News Flash: June 6, 2013 – IRS Form for PCORI Fee Now Available
The IRS has revised its Form 720 to allow for filing and payment of the Patient-Centered
Outcomes Research Institute (PCORI) fee required under the health care reform law. (The fee is
also sometimes called the Comparative Effectiveness Research or CER fee.) The first filing
deadline for the fee is July 31, 2013, and many employers that sponsor self-insured health plans
have been waiting for the revised Form 720 to be issued so that they can prepare their filings.
(Health insurers are responsible for calculating and paying the PCORI fee for fully insured
coverage, so employers that do not provide any self-insured coverage need not file.)
For details on the calculation and applicability of the PCORI fee, see Willis Human Capital
Practice Alert, February 2013, “IRS Issues Final Regulations For Comparative Effectiveness
Research Fees.”
Background
The PCORI was created under the health care reform law to promote research that evaluates and
compares the health outcomes obtained from, and the clinical effectiveness, risks and benefits of,
medical treatments, services, procedures, drugs and other strategies that treat, manage, diagnose or
prevent illness or injury. The funding source for the PCORI is a trust financed by PCORI fees paid
by health insurers and sponsors of self-insured health plans. Regulations finalized late last year
confirm that the fee is to be reported and paid annually using Form 720, “Quarterly Federal Excise
Tax Return.” Although it is called a “quarterly” return, Form 720 for PCORI fee purposes is only
filed once a year.
For an employer sponsoring a self-insured health plan, the first PCORI fee applies to the first plan
year ending on or after October 1, 2012, and the deadline for filing and payment of the fee is July
31 of the calendar year immediately following the last day of the plan year. This means that an
employer sponsoring a self-insured calendar year plan (with a plan year ending on December 31,
2012) must report and pay its first PCORI fee by July 31, 2013. In contrast, for a self-insured plan
with a plan year ending on January 31, 2013, the deadline is July 31, 2014.
For plan years ending before October 1, 2013 the PCORI fee is $1 multiplied by the average
number of lives covered under the plan. For plan years with later ending dates, the fee increases to
$2 multiplied by the average number of lives covered under the plan. That $2 amount may be
increase for inflation with respect to plan years ending on or after October 1, 2014.
IRS Form 720
Form 720 and instructions on how to complete and file it are posted on the IRS website. The IRS
has also posted questions and answers about the PCORI fee and a chart that outlines which types

2. of plans are subject to the PCORI fee. Although the IRS encourages electronic filing of Form 720,
it may also be filed via hard copy. Filing electronically requires a plan sponsor to submit the form
through an approved transmitter software developer. Additional information on electronic filing
can be found here.
This information is not intended to represent legal or tax advice and has been prepared solely for informational
purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this publication.