Fees paid by some health insurance policy issuers and plan sponsors to fund the Patient-Centered Outcomes Research Institute (PCORI) are deductible as business expenses under section 162, the IRS said in a legal advice memorandum.
The Affordable Care Act enacted a new fee to fund the PCORI, a nonprofit, private corporation established to assist the public in making informed health decisions that would be paid by some insurance policy issuers and the plan sponsors of some self-insured health plans. For fully insured health plans, the PCORI fee is paid by the insurance company that issues the insurance policy. For self-insured plans, the PCORI fee is paid by the employer.
For most plans, the first PCORI fee is due by July 31, 2013. For more information about the PCORI fee, please see Tax Flash 2013-07 and Tax Flash 2013-08.
In the legal memorandum (AM-2013-002), the IRS concluded that the fees represent an ordinary and necessary business expense and that the Affordable Care Act does not exempt the fees from being deductible.
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