A small annual federal fee that self-funded plans and HRAs often forget.
The Patient-Centered Outcomes Research Institute fee is a per-person annual charge on health plans, reported on IRS Form 720 each July. Insurance carriers pay it for insured plans. For self-funded plans and many HRAs, the employer pays it, and a missed filing is one of the most common quiet compliance gaps.
Who owes it depends on how the plan is funded.
The fee is small. The risk is not knowing that it applies to your arrangement.
Insured Plans
The carrier pays the fee on the insured plan and builds it into its costs. The employer has no filing to make for the insured plan itself.
Self-Funded Plans
The plan sponsor pays, based on the average number of lives covered during the plan year, and files Form 720. This applies to level-funded and stop-loss plans that are self-insured for tax purposes.
HRAs
A stand-alone HRA, including an individual coverage HRA, can owe the fee as a plan in its own right. An HRA integrated with another health plan is generally counted with that plan. Each arrangement has to be checked on its own facts.
What Is Exempt
Excepted benefits such as stand-alone dental and vision, and certain health FSAs that qualify as excepted benefits, are exempt. An excepted benefit HRA is also an excepted benefit. See excepted benefit HRAs.
The Due Date
Form 720 is due by July 31 of the year following the end of the plan year. For a calendar-year plan, the fee for 2026 is due July 31, 2027. The amount per covered life is set each year by the IRS.
It Is Scheduled to Sunset
The fee applies to plan years ending before October 1, 2029, after Congress extended it. It is a standing item on the compliance calendar until then.
Three ways to count, and why it matters.
Actual Count
Add the covered lives on each day of the plan year and divide by the number of days. Accurate, but it takes records.
Snapshot Method
Count lives on one date in each quarter, or on a set number of dates, and take the average. Easier, and fine for a plan with steady enrollment.
Form 5500 Method
For plans that file a Form 5500, use the participant counts reported there. It fits plans that already have the numbers.
The questions employers ask about the PCORI fee.
Six questions that come before July 31.
Does a fully insured employer owe the fee?
No. The insurance carrier pays it for the insured plan. The employer files nothing for that plan.
Does a level-funded plan owe it?
Often yes, because a level-funded plan is typically self-insured for tax purposes. The sponsor pays the fee and files Form 720.
Do HRAs owe the fee?
Some do. A stand-alone HRA can, and an HRA integrated with another plan is generally counted with that plan. We check each one.
When is it due?
By July 31 of the year after the plan year ends, on Form 720.
How is the amount calculated?
Multiply the IRS rate for the year by the average number of covered lives, counted by one of three accepted methods.
Does it ever go away?
It is scheduled to end for plan years ending on or after October 1, 2029, unless Congress extends it again.
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General information about the PCORI fee, not legal or tax advice. Plan-specific questions belong with your tax adviser or counsel, and we will bring them in.
Related guides.
Compliance Calendar
The dated filings and notices employers owe each year.
Form 5500 and Plan Documents
When a plan has to file and what it has to show.
Excepted Benefit HRA
An HRA that is an excepted benefit.
Compliance Services With Hold-Harmless Protection
What written protection on COBRA, PCORI and Form 5500 services covers, and what to ask.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
Fee on Self-Insured Health Plans (26 U.S.C. 4376)
The fee plan sponsors pay on self-insured plans, including how lives are counted.
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