PCORI Fee for Nonprofits

A nonprofit's tax-exempt status does not exempt its health plan from the PCORI fee. IRS Q&A 10 answers this directly: plans for tax-exempt organizations are subject to the fee unless they are exempt governmental programs, and a charity's employee plan is not one of those.

That does not mean every nonprofit files. Many small organizations buy an insured policy, and the insurer owes the fee on it. The nonprofit files only when it sponsors something self-insured, and an HRA is the arrangement most likely to catch a small office by surprise. If yours does, you will need to file the PCORI fee on Form 720.

Does your nonprofit have to file? Check by coverage type

Find your setup below. An HRA, or health reimbursement arrangement, is an employer-funded account that repays employees for medical costs. "Excepted benefit" is a term from the tax code for limited coverage that falls outside this fee.

If the first row is all you have, you can stop here. There is nothing for your nonprofit to file on that policy. Level-funded plans deserve a second look, because they can look insured from the outside. Our article on level-funded plans explains why.

What about churches and religious organizations?

The IRS PCORI Q&A, the coverage chart, and the regulation on self-insured plans do not mention churches or church plans. They offer no carve-out for them. What they do say is general: plans for tax-exempt organizations are covered, and the listed exceptions turn on the type of program or coverage, not on the type of organization.

So we can't point to an IRS PCORI source that exempts a church plan, and we can't point to one that addresses church plans specifically. A church with an insured policy can use the table above in the same way. A church with a self-insured plan, or one that takes part in a shared denominational plan, should ask a benefits adviser who the plan sponsor is before relying on anything here.

Plans run through an association or VEBA

Some nonprofits take part in a plan they don't run themselves. The regulation reaches plans established or maintained by a section 501(c)(6) organization and by a voluntary employees' beneficiary association, or VEBA. When a VEBA actually establishes or maintains the plan, its trustee is the sponsor. If the VEBA is merely a funding vehicle for your plan, the trustee line does not apply, and the sponsor question goes back to who maintains the plan.

If you belong to a shared plan, read the plan document or ask the plan's administrator who files. Don't assume someone else has done it. The regulation also allows a shared plan to have no single sponsor, in which case each participating employer files its own return.

Steps for a small nonprofit with a self-insured plan or HRA

1. Write down the plan year. It sets both the rate and the due date. Check the plan document rather than assuming it is the calendar year or your fiscal year.
2. Confirm the arrangement is subject to the fee. For an HRA or FSA, ask your adviser or plan vendor whether it qualifies as an excepted benefit. The chart gives the rule but not the test.
3. Count the average covered lives. Retirees and COBRA participants on the coverage count too. If an HRA or FSA is the only self-insured plan you have, you may count one life per participant and skip spouses and dependents. See our guide to counting covered lives for the methods.
4. Multiply by the rate for your plan year end. Plan years ending on or after October 1, 2025 and before October 1, 2026 use $3.84. Those ending on or after October 1, 2024 and before October 1, 2025 use $3.47.
5. File the second-quarter Form 720. You report once a year. You do not file for the other quarters if PCORI is your only item.
6. Pay by the due date. The fee is due with the return, and deposits are not required.
7. Put a recurring date in the calendar. Your organization stays responsible for the filing even when the staff who handled it move on.

A small nonprofit's fee, worked out

The organization and numbers are made up. A food bank buys an insured group medical policy and also offers an HRA that is not an excepted benefit. Its plan year runs October 1, 2025 through September 30, 2026. Twelve staff members participate in the HRA.

• The issuer handles the fee on the insured policy.
• The HRA is the food bank's only self-insured plan, so it may count one life per participant: 12 lives.
• The plan year ends before October 1, 2026, so the rate is $3.84.
• 12 x $3.84 = $46.08.
• July 31, 2027 is a Saturday, so the food bank may file on Monday, August 2, 2027.

A fee that size is easy to dismiss, but the return is still required. If your organization has already missed a year, read our article on late PCORI filing and penalties. You can also run your own number through the PCORI fee calculator.

Filing without a tax department

Most small nonprofits will file this form rarely and without specialist staff, so the job should stay simple. You can file your PCORI fee online with EasyFile720, an IRS-authorized e-file provider. E-filing is available but not required for this fee.

The account is free to create with no credit card, and you pay $39.95 when you file. The guided steps go from your organization's details through to submission. You enter the covered lives you counted, the rate and math are handled for you, and validations catch common mistakes before you submit. An authorized person signs electronically, and you get an electronic acknowledgment from the IRS once it's accepted. The return stays saved in your account, so next year's staff can find it.

FAQ

Sources: IRS PCORI Questions and Answers; IRS chart of the PCORI fee on common types of coverage; Instructions for Form 720 (Rev. June 2026); Form 720 (Rev. June 2026); 26 CFR 46.4376-1. General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.