The IRS recently released an updated Form 720, Quarterly Federal Excise Return, and instructions. The new versions reflect the PCOR fee applicable rate increase announced in IRS Notice 2022-4.
Specifically, the form and instructions now indicate that the PCOR fee for policy and plan years ending on or after October 1, 2021, but before October 1, 2022, is increased to the applicable rate of $2.79, multiplied by the average number of lives covered under the policy or plan. The fee for policy and plan years ending on or after October 1, 2020, but before October 1, 2021, remains at the applicable rate of $2.66, multiplied by the average number of lives covered under the policy or plan.
PCOR fees are payable by insurers and sponsors of self-insured plans (including sponsors of HRAs). The fee doesn’t apply to excepted benefits such as stand-alone dental and vision plans or most health FSAs. The fee, however, is required for retiree-only plans. The PCOR fee is generally due by July 31 of the calendar year following the close of the plan year.
Affected employers should be aware of the availability of the updated form and instructions and ensure they file and pay the applicable fee by the July 31 deadline.
Instructions for Form 720 » Form 720 »
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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