Generally, employers sponsoring group health plans with plan years ending on and after October 1, 2012 must pay a $1 fee multiplied by the average number of lives (including all employees, spouses and dependents) covered by a health plan. Insurers will submit the fee to the IRS for all fully insured group health plans, but employers are responsible for the fee for all self-insured group health plans. The fee should be submitted to the Internal Revenue Service ("IRS") on or before July 31, 2013 and should be accompanied by IRS Form 720. This fee will help to fund the Patient-Centered Outcomes Research Institute ("PCORI") and is described in greater detail here.

Last week, the IRS released Form 720 and instructions thereto to be utilized by employers preparing to pay the PCORI fee by July 31st. Form 720 is available here and the instructions are available here.

While some taxes imposed by the Affordable Care Act, such as the employer shared responsibility tax are not deductible, the Office of the Chief Counsel of the IRS also has issued a memorandum stating that the PCORI fee is an ordinary and necessary business expense and therefore a deductible business expense.