PCORI fee
The PCORI fee is an annual federal fee on health insurance policies and self-insured health plans, based on the average number of lives covered.
- LAW
- 26 U.S.C. §4376 for self-insured health plans
- LIMIT
- Plan years ending before October 1, 2029
- DEADLINE
- Form 720, July 31 after the plan year ends
- WATCH FOR
- Counting employees but not their covered dependents
The IRS calls it the Patient-Centered Outcomes Research Trust Fund fee. Who pays depends on the coverage’s funding. On an insured group health plan, the insurer that issues the policy pays. If you sponsor a self-insured health plan, including a self-insured health reimbursement arrangement (HRA), you pay the fee. You report and pay it once a year on Form 720, Quarterly Federal Excise Tax Return, by July 31 of the calendar year after the plan year ends. The fee applies to plan years ending before October 1, 2029.
Who pays the PCORI fee?
The law puts the PCORI fee on the issuer of a specified health insurance policy and on the plan sponsor of an applicable self-insured health plan. For a plan one employer maintains, the plan sponsor is that employer. An insured medical plan paired with a self-insured HRA can mean two fees: the insurer pays on the policy, and you pay on the HRA. Coverage limited to excepted benefits owes no fee.
| COVERAGE | WHO PAYS THE PCORI FEE |
|---|---|
| Insured group health plan | The insurer that issues the policy |
| Self-insured group health plan | You, as the plan sponsor |
| Self-insured HRA | You, as the plan sponsor |
| Stand-alone dental or vision plan | No one: excepted benefits owe no fee |
| Most health flexible spending arrangements | No one: excepted benefits owe no fee |
| Employee assistance or wellness program | No one, if it provides no significant medical care |
How is the PCORI fee calculated?
The PCORI fee equals the average number of lives covered during the plan year times the dollar amount for the period the plan year ends in. The amount is adjusted each year for the increase in projected per capita National Health Expenditures. A self-insured plan sponsor counts lives with the actual count, snapshot, or Form 5500 method, and uses the same method for the whole plan year. Generally, every covered person counts, including dependents, COBRACOBRA. COBRA is the federal law that lets eligible employees and their covered dependents continue group health coverage for a limited period after a qualifying event.Click to open the term beneficiaries, and retirees.
| PLAN YEAR ENDS | FEE PER COVERED LIFE |
|---|---|
| October 1, 2025 through September 30, 2026 | $3.84 |
| October 1, 2024 through September 30, 2025 | $3.47 |
| October 1, 2023 through September 30, 2024 | $3.22 |
How do you report and pay the PCORI fee?
A calendar-year 2025 self-insured plan averaging 200 covered lives owes 200 × $3.84, or $768, by July 31, 2026.
- 01
Count the lives. Find the average number of lives covered with one counting method, used for the whole plan year.
- 02
Apply the dollar amount for the period your plan year ends in.
- 03
Report the fee in Part II of Form 720 as IRS No. 133, on the second-quarter return. If you file Form 720 only for this fee, file no first, third, or fourth quarter return.
- 04
Pay by July 31 of the calendar year after the plan year ends. Deposits are not required; if you pay through EFTPS, apply the payment to the second quarter.
- 05
Correct errors on Form 720-X. An overpayment cannot reduce the fee due the next July 31.
Frequently asked
- 26 U.S. Code § 4376 - Self-insured health plans
- 26 CFR § 46.4376-1 - Fee on sponsors of self-insured health plans.
- Patient Centered Outcomes Research Trust Fund fee: Questions and answers
- Instructions for Form 720 (06/2026)
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.