PCORI Actual Count Method Explained
The actual count method is the most literal way to figure PCORI average covered lives: add the lives covered on each day of the plan year, then divide by the number of days in the plan year. That is the whole formula in the regulation. The rest of the work is getting a correct daily total, and you can do that from enrollment dates without keeping a 365-row spreadsheet.
In the regulation's own example, a daily sum of 3,285,000 divided by 365 gives 9,000 average lives. The example below shows how a much smaller plan gets to its own number.
What is the formula?
- For each day of the plan year, find the number of lives covered.
- Add all of those daily numbers. This article calls that total covered-life days.
- Divide by the number of days in the plan year.
- Multiply the average by the rate for the plan year. That is your fee.
Plan sponsors and insurers both have this method available, under separate parts of the regulations. It works the same way for each.
Worked example with people joining and leaving
Here is a made-up self-insured plan with a plan year from October 1, 2025 to September 30, 2026. That is 365 days. Instead of writing out each day, multiply each group by the days it was covered:
| Who | Covered dates | Lives | Days | Covered-life days |
|---|---|---|---|---|
| Employees and dependents here all year | Oct 1 to Sep 30 | 40 | 365 | 14,600 |
| New hire and spouse | Mar 15 to Sep 30 | 2 | 200 | 400 |
| Baby added to a family | Jun 1 to Sep 30 | 1 | 122 | 122 |
| Former employee on COBRA | Oct 1 to Apr 26 | 1 | 208 | 208 |
| Total | 15,330 |
The average is 15,330 divided by 365, which is 42 lives. This plan year ends before October 1, 2026, so the rate is $3.84. The fee is 42 x $3.84 = $161.28. You can enter your own average in the PCORI fee calculator to check the multiplication.
Under the July 31 rule, this return would be due in 2027. Because July 31, 2027 is a Saturday, the date moves to Monday, August 2, 2027.
Who goes in the daily count?
The method only works if your daily total includes the right people. From the IRS Q&A and the regulation:
- Count each person. IRS Q&A 5 says an employee and a dependent child are two lives on a self-insured plan.
- Count COBRA and retiree coverage. Q&A 6 says these people and their beneficiaries are included.
- You may leave out lives covered solely by insured options. If a plan offers both fully insured and self-insured options, the sponsor is permitted to disregard them.
- A person on two arrangements counts once if you combine them. Self-insured arrangements with the same sponsor and same plan year may be treated as one plan, and the regulation says the same life counts once.
- HRA-only and FSA-only sponsors get a simpler count. If that is your only self-insured plan, each participant may be treated as a single life, even for a family.
How many days do you divide by?
Use the number of days in your plan year, which isn't always 365. Two cases come up:
- Leap years. A plan year that includes February 29 has 366 days. A 2028 calendar plan year would be one example.
- Short plan years. IRS Q&A 12 and 13 say a short plan year still owes the fee, based on the average lives during that plan year. A made-up plan running April 1 to December 31 has 275 days, so the daily sum is divided by 275.
When does the actual count fit?
This method fits when your enrollment system can export start and end dates for each covered person, including dependents. It reflects every mid-year change, since it doesn't rest on a few sample dates. The harder part is the data: if your dependent records are incomplete, or your administrator holds the records, it takes more effort than the snapshot method.
The regulation requires you to use the same method for the entire plan year, but you can use a different one the next year. So actual count isn't a lifetime choice. Our overview of the covered-lives methods shows the other options side by side.
How do you file once you have the average?
Self-insured sponsors report the average in column (a) of the matching line on the second-quarter Form 720. On the June 2026 form, that is line 133(c) at $3.47 or line 133(d) at $3.84. The fee goes in column (c), and the total on the IRS No. 133 line.
You can do this online. To file your PCORI fee with EasyFile720, you go through a guided filing from your business details to submission. You do the counting and enter your figures, the rates are built in, and the math is calculated for you. Validations catch common mistakes before you submit, and you sign electronically.
Your next step: finish your covered-life days total, divide, and keep the worksheet. Then create a free account, with no credit card needed, and start from the PCORI fee filing page. You pay $39.95 when you file.
FAQ
Do I need a separate count for every single day?▼
You need the total for each day, but you can get there from start and end dates. Multiplying each person's covered days and adding them gives the same sum as adding 365 daily totals.
What if the average comes out to a fraction?▼
The regulation and instructions we reviewed don't state a rounding rule for average covered lives. If your result isn't a whole number, check with a tax professional about how to report it.
Do retirees and people on COBRA go in the daily count?▼
Yes. IRS Q&A 6 says COBRA participants, retirees, other former employees, and their beneficiaries must be taken into account.
Can I switch to actual count partway through the plan year?▼
No. A sponsor must use the same method for the whole plan year. You may use a different method the next plan year.
File your PCORI fee online
Create a free account with no credit card and build your return. You pay $39.95 only when you file. EasyFile720 is an IRS-authorized e-file provider, and you get an acknowledgment when the IRS accepts your return.
Sources: 26 CFR 46.4375-1, 46.4376-1; IRS PCORI Questions and Answers (Q3, Q5, Q6, Q12, Q13); IRS PCORI fee page; Instructions for Form 720 and Form 720 (Rev. June 2026). General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
