December 21, 2021
On December 21, 2021, the IRS released Notice 2022-4, which announces that the adjusted applicable dollar amount for PCOR fees for plan and policy years ending on or after October 1, 2021, and before October 1, 2022, is $2.79. This is a $.13 increase from the $2.66 amount in effect for plan and policy years ending on or after October 1, 2020, but before October 1, 2021.
As a reminder, 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 of retiree-only plans. The fee is calculated by multiplying the applicable dollar amount for the year by the average number of lives and is reported and paid on IRS Form 720 (which hasn’t yet been updated to reflect the increased fee). It’s expected that the form and instructions will be updated prior to July 31, 2022, since that’s the first deadline to pay the increased fee amount for plan years ending between October and December 2021. The PCOR fee is generally due by July 31 of the calendar year following the close of the plan year.
The PCOR fee requirement was reinstated through the Further Consolidated Appropriations Act, 2020 and will be in place until the plan years ending after September 30, 2029.
IRS Notice 2022-4 »