PCORI Form 5500 Method Explained
If your self-insured plan already files a Form 5500, the annual report for employee benefit plans, the PCORI Form 5500 method lets you reuse its participant totals rather than counting lives yourself. It has two conditions that decide whether it helps: the form must be filed by the PCORI due date, and the formula depends on the type of coverage your plan offers. Getting that second point wrong can double or halve your fee.
What is the formula?
You take two figures from the form: total participants covered at the beginning and at the end of the plan year.
| Your plan offers | Average covered lives equals |
|---|---|
| Only self-only coverage | (Beginning total + ending total) divided by 2 |
| Self-only and other than self-only coverage | Beginning total + ending total, with no division |
A plan with any family or employee-plus-one tier falls into the second row. That sum isn't an average in the usual sense, but it is the number the regulation tells you to use.
Worked example: same totals, different coverage
This made-up plan has a plan year ended June 30, 2026, so the rate is $3.84. Its form reports 180 participants at the beginning of the plan year and 196 at the end.
| Coverage offered | Calculation | Lives | Fee at $3.84 |
|---|---|---|---|
| Self-only only | (180 + 196) divided by 2 | 188 | $721.92 |
| Self-only and family | 180 + 196 | 376 | $1,443.84 |
The same two numbers lead to fees that differ by a factor of two. So confirm what your plan offers before you divide. You can run your result through the PCORI fee calculator.
When does the filing date rule this method out?
The regulation allows the method only if the Form 5500 or 5500-SF is filed no later than the due date for the PCORI fee for that plan year. An extension of Form 5500 doesn't change this test, and the regulation's examples show how it plays out:
| Regulation example | Form 5500 filed | PCORI due date | Result |
|---|---|---|---|
| Calendar plan year ended Dec 31, 2013 | Sep 30, 2014, under an automatic extension | July 31, 2014 | Not eligible |
| Fiscal plan year ended Jul 31, 2013 | May 15, 2014, on its extended due date | July 31, 2014 | Eligible |
The pattern is what matters. A calendar-year plan that extends its Form 5500 past the fee date loses this method for that year. A fiscal-year plan may have more room, since its form may come due well before the following July.
In the second example, note the form year: the plan year ending July 31, 2013 is reported on the "2012 Form 5500," because of when the plan year began. So check you are looking at the form for the correct plan year.
What if some participants are on an insured option?
Form 5500 totals can include people outside the self-insured part of the plan. If the plan has both fully insured and self-insured options, the regulation lets the sponsor disregard lives covered solely under the insured options. It subtracts them from each total before adding.
A made-up plan with both coverage tiers reports these numbers. The self-insured figure is the total less those on the insured option:
| Point in plan year | Total participants | On insured option | Self-insured |
|---|---|---|---|
| Beginning | 500 | 300 | 200 |
| End | 520 | 310 | 210 |
| Sum | 410 |
At $3.84, the fee is 410 x $3.84 = $1,574.40. Without the subtraction, the sum would be 1,020 lives.
What should you check before relying on the form?
Pull the filed form, not a draft, and confirm four things:
- It covers the self-insured plan. The regulation refers to the form filed for the applicable self-insured health plan. A form for a different benefit plan doesn't help.
- It covers the right plan year. Match the beginning and end dates on the form to the plan year whose fee you are figuring.
- You have the total participant figures. The regulation uses total participants covered at the beginning and end of the plan year, as reported on the form.
- You know whether the plan is self-only. One family or employee-plus-one tier means you don't divide by 2.
If a TPA or outside firm prepares your Form 5500, ask for the filed copy and the date it was filed, so you can keep both with your PCORI records.
When does this method fit, and when doesn't it?
- It fits when your Form 5500 is filed on time and the participant totals are already there, so no one has to rebuild enrollment.
- It may cost more if your plan offers family coverage but most participants choose self-only. The sum counts each person about twice, whatever tier they chose.
- It may cost less if most participants are in larger family tiers, since it doesn't count dependents one by one.
- It doesn't work if the form will be filed after the fee date, or if the plan has no form to rely on.
A quick test of a different method can be worthwhile, since one year's choice doesn't bind the next. The covered lives overview shows the alternatives. HRA-only and FSA-only sponsors have a separate one-life-per-participant rule, covered in our HRA and FSA post.
How do you file after you have the number?
The result goes in column (a) of line 133(c) or 133(d) on the June 2026 Form 720, depending on when the plan year ended. For the example above, the rate is $3.84 and the return is due August 2, 2027.
To file your PCORI fee online, enter your figures in EasyFile720's guided filing, from your business details through to submission. The rates are built in, the math is calculated for you, and validations catch common mistakes before you submit. You sign electronically, then get an electronic acknowledgment from the IRS once the return is accepted. Preparers who handle several client plans can file for multiple businesses under one account.
Your next step: confirm your Form 5500 filing date, note the beginning and ending totals, then create a free account with no credit card from the PCORI fee filing page. You pay $39.95 when you file.
FAQ
Can I use the Form 5500-SF instead of the full Form 5500?▼
Yes. The regulation names both the Form 5500 and the Form 5500-SF, as long as it is the form filed for the applicable self-insured health plan for that plan year.
What if my plan does not file a Form 5500?▼
This method is based on numbers reported on a filed form, so without one you would use the actual count or snapshot method instead.
Can an insurance company use this method?▼
No. IRS Q&A 4 lists it only for plan sponsors of self-insured plans. Insurers have actual count, snapshot, member months, and state form.
Can I use this method one year and another the next?▼
Yes. The regulation requires one method for a plan year but lets a sponsor change methods from one plan year to the next.
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 46.4376-1(c)(2)(v) and (vii); IRS PCORI Questions and Answers (Q3, Q4); 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.
