Before we get into the PCORI salary cap, let us first understand the Patient Centered Outcome Research Institute and related fees. The PCORI fee is required to be paid by self-insured sponsors who are covered by COBRA, retiree-only coverage, and specific Health Reimbursement Arrangement (HRA) coverage. A majority of group health plans are required to pay the PCORI fee, which includes those that come under the ACA umbrella, and retiree-only plans.
How to calculate the PCORI salary cap? For PCORI salary calculations, you do not directly use a salary cap figure. First the PCORI fee is calculated based on the average number of covered lives in the health plan. This number is then multiplied by the current applicable dollar amount set by the IRS every year. In essence, the PCORI salary cap is not based on the individual salaries, but based on the size of your employee population covered by the plan.
As it is, there is no direct salary cap associated with PCORI, the fee is actually applied to the health plan and not individual salaries. It is important to note that other sponsors, both non-federal and federal, may also impose salary caps. It is therefore important to understand the difference between the various types of salary caps. Applicants need to carefully review the solicitation guidelines for each sponsor while they submit grant proposals.
As mentioned in the above section, the PCORI salary cap is set at $200,000 as of June 2016. Let us compare the PCORI salary cap with that of NIH. The NIH salary cap applies to all DHHS agencies, which includes FDA, NIH, CDC, HRSA, and others. The NIH salary cap is set at $221,900, as of 2024. This cap is a legislatively mandated limit based on the direct salary of individuals who are working on DHHS grants, cooperative agreements, and extramural R&D contracts.
Apart from PCORI and NIH salary caps, there is another category for Industry-sponsored trials. PCORI salary cap and Industry sponsored trial salary cap are different. Where there is a clear PCORI salary cap, the salary cap for industry-sponsored trials vary on a case-to-case basis.Wrapping it up
A clear understanding of the PCORI salary cap is essential for accurate tax filings for self-insured plans. Whether it is decoding the PCORI fee calculation or guidance on PCORI salary cap, Simple720 has you covered. We simplify your tax filings, so you can rest assured of a hassle free process. Reach out to us for more details on PCORI salary cap.
FAQs
Is there a cap on the allowable fringe rate?
No, there is no cap on the allowable fringe rate. Applicants must follow the fringe rate policy of their organization and must include the policy document along with other budget documents.
If an individual’s salary is $250,000, can the applicant charge $200,000 on the contract at 80% of the individual’s time?
No, applicants must use no more than the minimum allowed salary amount as the base for calculating the amount of the salary request.
Is the personal cap per individual or per application?
The personal salary cap is per individual.