PCORI: Self-Insured vs. Fully Insured Plans
The PCORI fee is paid on both self-insured and fully insured coverage. What changes is who owes it. If an insurance company issued a health policy, the insurer reports and pays. If the employer funds benefits itself, in whole or in part, the employer or other plan sponsor files Form 720. Most other PCORI questions, from "do I file?" to "which line?", follow from this one fact about the plan.
Self-insured and fully insured, side by side
| Fully insured policy | Self-insured plan | |
|---|---|---|
| IRS term | Specified health insurance policy | Applicable self-insured health plan |
| Who reports and pays | The issuer (insurance company) | The plan sponsor, usually the employer |
| Internal Revenue Code section | Section 4375 | Section 4376 |
| June 2026 Form 720 lines | 133(a) at $3.47, 133(b) at $3.84 | 133(c) at $3.47, 133(d) at $3.84 |
| Counting methods | Actual count, snapshot, member months, state form | Actual count, snapshot, Form 5500 |
| Combining coverage | No combining rule for lives on more than one policy | Plans with the same sponsor and same plan year may be treated as one |
| Due date | July 31 of the year after the policy year ends | July 31 of the year after the plan year ends |
The chart holds for COBRA and retiree-only coverage too. The IRS chart lists both as "the issuer if insured, the plan sponsor if self-insured." State and local government plans follow the same split.
How can you tell which you have?
The regulation asks a simple question: is any portion of the coverage provided other than through an insurance policy? If so, and an employer or similar group maintains the plan, it is an applicable self-insured health plan. Work through these checks:
- Who is on the hook for claims? If an insurer collects fixed premiums in exchange for providing coverage, that points to insured. The regulation treats a hospital or medical service plan contract and an HMO contract as specified health insurance policies too. If claims are paid from your money or a fund you maintain, that points to self-insured.
- Do you have stop-loss coverage? Stop-loss usually signals self-funding. The regulation describes it as a policy where the insurer takes on losses above a specified amount while the person maintaining the plan keeps its liability to, and contractual relationship with, the covered people.
- Do you reimburse expenses directly? An HRA is its own self-insured arrangement unless it qualifies as an excepted benefit, even if the main medical plan is insured.
- What do the documents say? If you can't tell from your invoices, ask your broker or administrator whether the coverage is insured or self-funded, and read the policy or plan document.
Why does funding decide who files?
IRS Q&A 7 puts the duty on exactly two groups: issuers of specified health insurance policies, and plan sponsors of applicable self-insured health plans. The law doesn't assign it by company size or by who runs the paperwork. A made-up employer with 150 average covered lives on a plan year ending December 31, 2025 shows how this works, at a rate of $3.84:
| If the plan is... | Fee | Who files Form 720 |
|---|---|---|
| Fully insured | 150 x $3.84 = $576.00 | The insurance company, as part of its own return |
| Self-insured | 150 x $3.84 = $576.00 | The employer, on its second-quarter Form 720 |
The math is the same, but only in the second row does the employer have a filing. That is why an employer that moves from insured to self-funded picks up a new annual return. The plan year when the change takes effect may also be short, and the IRS says short plan years owe the fee too.
"Plan sponsor" has its own definition. For a single-employer plan, it is the employer. For a plan set up by several employers, it can be the person named in the plan document. If nobody is named, each employer files separately for its own employees, according to the regulation.
What if your plan has both insured and self-insured pieces?
Mixed setups work in one of three ways:
- One plan with insured and self-insured options. The sponsor may leave out lives covered solely under the fully insured options when it counts lives for the fee. Say a made-up plan has 300 average lives, with 160 only on the insured option. The sponsor may count 140, for a fee of 140 x $3.84 = $537.60.
- An insured policy plus an HRA. The IRS chart says the two are subject to separate fees. The insurer handles the policy, and you handle the HRA. Our post on HRAs and FSAs goes further into this.
- A self-insured medical plan plus an HRA. If both have the same sponsor and plan year, they may be treated as one plan, so the HRA isn't charged a separate fee.
What should each side do next?
If you are fully insured with nothing self-funded on the side, you have no PCORI filing as an employer. You don't need to open a Form 720 for this fee.
If you are self-insured, your filing is once a year on the second-quarter Form 720, due July 31 of the year after the plan year ends. If PCORI is your only excise tax, you don't file in the other quarters. Deposits aren't required. For plan years that end in 2026, the deadline moves to Monday, August 2, 2027, because July 31, 2027 is a Saturday. Plan years ending through September 30, 2026 take $3.84. The IRS publishes the rate for later plan years, so check the second-quarter 2027 instructions for those.
Once you know your average covered lives, the PCORI fee calculator gives you an estimate. To file your PCORI fee online with EasyFile720, you go through a guided filing from your business details to submission and sign electronically. The rates are built in, the math is calculated after you enter your figures, and validations catch common mistakes before you submit. An account is free to create with no credit card, and you pay $39.95 when you file. Your next step is to find your plan year end date and lives figure, then start from the PCORI fee filing page.
FAQ
Does stop-loss insurance make my plan fully insured?▼
No. Under the regulation, a stop-loss insurer covers losses above a specified amount while the plan sponsor keeps its liability to the covered people. The stop-loss policy itself isn't subject to the fee, and the underlying plan can still be self-insured.
Is the PCORI rate lower for one type of plan?▼
No. The June 2026 Form 720 shows the same $3.47 and $3.84 amounts for specified health insurance policies and for applicable self-insured health plans.
We use a third-party administrator. Is the plan self-insured?▼
Using an administrator doesn't settle the question by itself. Look at whether any part of the coverage is provided other than through an insurance policy, and who stays liable for claims.
Are government and nonprofit employers treated differently?▼
Generally no. IRS Q&A 10 says plans of tax-exempt organizations and governmental entities are subject to the fee unless they are an exempt governmental program, and the IRS chart applies the same insured and self-insured split to state and local government plans.
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: IRS PCORI Questions and Answers (Q4, Q7, Q8); IRS chart of coverage types; Form 720 and Instructions for Form 720 (Rev. June 2026); 26 CFR 46.4375-1, 46.4376-1. General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
