PCORI Fee: Rates, Deadlines & How to File
What health insurers and self-insured employers need to know about the IRS PCORI fee — who owes it, how the calculation works, and how to report it on Form 720 by July 31.
Quick Answer
The PCORI fee is an annual fee owed by health insurance issuers and sponsors of self-insured health plans — including many employers with HRAs or level-funded plans. It equals the average number of covered lives multiplied by an IRS-indexed dollar amount, and it is reported once a year on the second-quarter Form 720 (IRS No. 133), due July 31.
What Is the PCORI Fee?
The PCORI fee funds the Patient-Centered Outcomes Research Institute, an organization created by the Affordable Care Act to finance research comparing the effectiveness of medical treatments. To pay for that research, Congress imposed a per-covered-life fee on health coverage. The fee was originally scheduled to sunset, but Congress extended it, and it now applies through plan and policy years ending before October 1, 2029.
Although it lives on Form 720, the Quarterly Federal Excise Tax Return, the PCORI fee itself is annual, not quarterly. That mismatch is exactly why it trips up so many filers: an employer who owes nothing else on Form 720 still has to file the second-quarter return each summer just to report this one fee.
If a broker, TPA, or CPA just told you that you owe an IRS PCORI fee, the short version is this: if your organization sponsors a self-insured health plan of almost any kind, the fee is your responsibility — and it is straightforward once you know the formula and the deadline.
Who Pays the PCORI Fee?
The fee applies to two groups: issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans. In practice, who files depends on how your coverage is funded:
| Type of Coverage | Who Files & Pays | Notes |
|---|---|---|
| Fully insured group or individual health policy | The insurance carrier (issuer) | The employer generally does not file for the insured policy itself. |
| Self-insured (self-funded) health plan | The plan sponsor — usually the employer | The employer files Form 720 and pays the fee directly. |
| Level-funded health plan | The plan sponsor — usually the employer | Level-funded arrangements are self-insured plans for PCORI purposes. |
| Health reimbursement arrangement (HRA), including ICHRAs | The employer sponsoring the HRA | Applies even when the HRA is paired with a fully insured policy. |
The HRA rule surprises many employers: because an HRA is generally an applicable self-insured health plan, an employer can owe a PCORI fee on its HRA even when the carrier already pays the fee on the related insured policy. One exception — an HRA and another self-insured plan with the same plan sponsor and the same plan year are treated as a single plan, subject to a single fee.
Certain coverage is exempt, most notably plans that provide only excepted benefits — such as stand-alone dental or vision coverage and most health FSAs. When in doubt, the current IRS Form 720 instructions include the definitive list of what counts as a specified health insurance policy or an applicable self-insured health plan.
PCORI Fee Rate (2026)
The PCORI fee is a flat applicable dollar amount per covered life, and the IRS adjusts that amount every year based on projected increases in national health expenditures per capita. The updated amount is announced in an annual IRS notice and reflected in the Form 720 instructions.
Two details matter when looking up your rate. First, the correct amount depends on when your plan or policy year ends — plan years ending before October 1 use a different applicable dollar amount than plan years ending October 1 through December 31. Second, because the amount is indexed annually, always confirm the figure against the current IRS Form 720 instructions or the IRS notice for your plan yearrather than a prior year's article or spreadsheet.
The formula:PCORI fee = average number of lives covered during the plan year × the applicable dollar amount for the date your plan year ended. File720Online applies the current IRS No. 133 rates for you when you e-file, so you never have to hunt through IRS notices.
How to Calculate It (3 Methods)
The heart of every PCORI fee calculation is the average number of lives coveredduring the plan year — and "lives" means everyone enrolled, including spouses and dependents, not just employees. Sponsors of self-insured plans may use any one of three IRS-approved counting methods:
1. Actual Count Method
Count the total number of lives covered on each day of the plan year, then divide by the number of days in the plan year. This is the most precise method and works well when your enrollment system can report daily covered lives.
2. Snapshot Method
Count covered lives on one or more designated dates in each quarter of the plan year, then divide the total by the number of dates used. The dates must be used consistently for each quarter. The snapshot method has two variations: the snapshot count (count actual covered lives) and the snapshot factor (count employees with self-only coverage as one life and employees with other-than-self-only coverage as 2.35 lives).
3. Form 5500 Method
Use the participant counts already reported on the Form 5500 filed for the plan. For a plan offering only self-only coverage, average the participant counts at the beginning and end of the plan year. For a plan with other coverage tiers, add the beginning and ending participant counts together. To use this method, the Form 5500 must be filed no later than the July 31 PCORI due date for that plan year.
Whichever method you choose, you must use it consistently for the entire plan year, though you may switch methods from one plan year to the next. Insurance issuers have their own parallel set of counting methods, but for employers the three methods above are the ones that matter. One simplification worth repeating: HRA sponsors subject to the fee may treat each participant as a single covered life, ignoring spouses and dependents.
When It's Due (July 31)
The PCORI fee due date is July 31 of the calendar year following the last day of the plan or policy year. It is always reported on the second-quarter Form 720 — even for plan years that ended in a different quarter. A calendar-year plan that ended December 31, 2025 and a fiscal-year plan that ended June 30, 2025 both report on the same Q2 return due July 31, 2026.
This is the most confusing part of the PCORI fee: Form 720 is otherwise quarterly, but the PCORI fee is annual. If it is your only excise tax liability, you file Form 720 just once a year — the July 31 second-quarter return — and skip the other three quarters. There is no automatic extension for Form 720, so July 31 is firm (moving to the next business day only when it falls on a weekend or federal holiday).
Businesses that owe other excise taxes simply add IRS No. 133 to their regular second-quarter return. For the full quarterly calendar, see our guide to Form 720 due dates and deadlines.
Reporting PCORI on Form 720 (Line 133)
On the form itself, the PCORI fee appears in Part II of Form 720 under IRS No. 133 ("Patient-centered outcomes research fee"). The line asks for the average number of lives covered and applies the applicable rate — with separate entries for plan years ending before October 1 and on or after October 1 — to produce the fee.
Filing comes down to four steps: determine your average covered lives using one of the three methods above, look up the applicable dollar amount for your plan-year end date, enter both on IRS No. 133, and pay the fee with your return — electronically or by check with the Form 720-V voucher. With File720Online, you answer a few questions about your plan year and covered lives, and we prepare the IRS No. 133 entry and e-file your second-quarter return with instant IRS confirmation. See our pricing — most PCORI-only filers are done in minutes for a flat fee.
Ready to file? Start your Form 720 with the PCORI fee now and get IRS acceptance confirmation before the July 31 deadline.
Common PCORI Fee Mistakes
Missing the July 31 deadline
Because Form 720 is a quarterly return, many employers who owe only the PCORI fee simply do not realize they have a filing obligation — or assume it follows their income tax calendar. The PCORI fee is reported once a year on the second-quarter Form 720, due July 31.
Using the wrong counting method
Self-insured plan sponsors must apply a single counting method consistently for the entire plan year. Switching methods mid-year, or borrowing the insurer-only methods, can produce an incorrect average covered-lives figure and an incorrect fee.
Assuming the insurer pays when the plan is self-insured
For fully insured coverage the carrier handles the fee, but for self-insured and level-funded plans the responsibility shifts to the plan sponsor. Employers who move from fully insured to level-funded coverage often miss that the PCORI filing obligation moved with them.
Forgetting the HRA
An HRA is generally an applicable self-insured health plan, so an employer can owe the PCORI fee on its HRA even when its major medical coverage is fully insured and the carrier pays the fee on that policy. A special rule helps here: an HRA sponsor may treat each participant as a single covered life, without counting spouses or dependents.
PCORI Fee FAQ
What is the PCORI fee?
The PCORI fee is an annual fee created by the Affordable Care Act that funds the Patient-Centered Outcomes Research Institute (PCORI). It applies to issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans, and it is reported once a year on the second-quarter IRS Form 720 under IRS No. 133.
Who pays the PCORI fee?
For fully insured coverage, the insurance carrier pays the fee. For self-insured health plans — including level-funded plans and most HRAs — the plan sponsor, typically the employer, must file Form 720 and pay the fee directly.
When is the PCORI fee due?
The PCORI fee is due by July 31 of the calendar year following the end of the plan or policy year. It is always reported on the second-quarter Form 720, regardless of when the plan year ends. For plan years that ended in 2025, the fee is due July 31, 2026.
What is the current PCORI fee rate?
The IRS adjusts the PCORI fee’s applicable dollar amount every year based on projected increases in national health expenditures per capita, and announces the new amount in an annual notice. The correct rate depends on when your plan or policy year ends, so check the current IRS Form 720 instructions or the IRS PCORI fee page for the amount that applies to your plan year.
Do I have to file Form 720 every quarter if I only owe the PCORI fee?
No. If the PCORI fee is your only excise tax liability, you file Form 720 just once a year — the second-quarter return due July 31. You do not need to file Form 720 for the other three quarters.
Do employers with HRAs or level-funded plans owe the PCORI fee?
Generally, yes. HRAs and level-funded plans are treated as self-insured health plans, so the sponsoring employer is responsible for the PCORI fee. HRA sponsors may treat each participant as a single covered life when calculating the fee.
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