PCORI Fee for a Short Plan Year
A short plan year owes the PCORI fee like any other plan year. The formula is the same: average covered lives during that plan year times the rate tied to the date it ends. It is due July 31 of the calendar year after it ends. You do not scale the rate down, and the year does not roll into the next one.
A short plan year is any plan year of fewer than 12 months. IRS Q&A 12 gives two common causes: a new calendar-year plan that starts after January 1, and a fiscal-year plan that switches to a calendar year. Each is covered below with current rates. If you want to skip ahead, you can file the PCORI fee here once you have your count.
How the PCORI fee works for a short plan year
IRS Q&A 13 and 14 boil down to three points:
- Lives. Average only over the short plan year. Months outside it are ignored.
- Rate. Use the rate for the band that the short plan year's end date falls in. Plan years ending on or after October 1, 2025 and before October 1, 2026 use $3.84. Plan years ending on or after October 1, 2024 and before October 1, 2025 use $3.47.
- Due date. July 31 of the calendar year after the short plan year ends.
The mistake to avoid is prorating twice. The average already reflects only the short period. Taking 9/12 of the result would reduce it again, and nothing in the IRS formula calls for that.
Example: a new plan that starts in April
The company and numbers are made up. A company starts a self-insured calendar-year plan on April 1, 2025. Its first plan year runs April 1 through December 31, 2025, which is 275 days.
It uses the actual count method, which adds the lives covered on each day of the plan year and divides by the number of days in the plan year. For this year, the divisor is 275, not 365.
- The daily counts add up to 33,000.
- 33,000 / 275 = an average of 120 covered lives.
- The plan year ended December 31, 2025, so the rate is $3.84.
- 120 x $3.84 = $460.80.
- The fee was due July 31, 2026, on the second-quarter Form 720, on line 133(d) of the June 2026 revision.
Note the timing. Nine months of coverage carries the full $3.84 rate, and the filing came due only seven months after the year ended. If that date went by unnoticed, see our article on late PCORI filing.
Examples: a plan that changes its plan year
A change of plan year can bring two plan years to the same return, or spread them out. It depends on the direction of the change.
| Scenario (made up) | Plan year | Rate | Due |
|---|---|---|---|
| A: July-June plan moves to calendar year | July 1, 2024 to June 30, 2025 | $3.47 | July 31, 2026 |
| A: the short year | July 1 to Dec 31, 2025 | $3.84 | July 31, 2026 |
| A: first full calendar year | Jan 1 to Dec 31, 2026 | Not yet in our IRS sources | August 2, 2027 |
| B: calendar plan moves to July-June | Jan 1 to Dec 31, 2025 | $3.84 | July 31, 2026 |
| B: the short year | Jan 1 to June 30, 2026 | $3.84 | August 2, 2027 |
| B: first full July-June year | July 1, 2026 to June 30, 2027 | Not yet in our IRS sources | July 31, 2028 |
August 2, 2027 appears because July 31, 2027 is a Saturday, and the Form 720 instructions let you file on the next business day.
Scenario A puts two rates on one return. The last fiscal year and the short year both end in 2025, so both are due July 31, 2026. The IRS says to file only one Form 720 per quarter, so both belong on the same second-quarter return.
Suppose the last fiscal year averaged 80 lives and the short year averaged 84. On the June 2026 form:
- Line 133(c): 80 x $3.47 = $277.60.
- Line 133(d): 84 x $3.84 = $322.56.
- Total on the line for IRS No. 133: $600.16.
Scenario B has the opposite effect. One plan year ends in each of 2025, 2026, and 2027, and each is due in the following year. Each return reports one plan year, and nothing is skipped.
Our article on Form 720 line 133 explains how the four sub-lines fit together, and you can check a figure in the PCORI fee calculator.
Which counting method fits a short plan year?
A self-insured sponsor chooses among actual count, snapshot, and Form 5500. The IRS short-year Q&As don't add special counting rules, so here is how each general rule reads against a short year:
- Actual count fits most directly. The regulation divides by the number of days in the plan year, whatever that number is.
- Snapshot needs a count date in each quarter of the plan year, with all dates inside the same plan year. The regulation does not explain how to apply it when a plan year has fewer than four full quarters, so get advice if you want to use it here.
- Form 5500 requires that the Form 5500 for that plan year be filed by the fee's due date. Our sources do not add a special short-year rule to that.
Whichever you choose, you must use it for the whole plan year. You may use a different method the next plan year. More detail is in our guide to average covered lives.
Filing a short plan year online
On the return itself, a short year looks like any other year: average lives and a rate on the right line. What makes it harder is getting the end date right, especially when two plan years land on one return, so write out your plan years first as in the table above.
When you are ready to file your PCORI fee online, EasyFile720 has a guided flow from your business details through to submission. You enter your figures, and the rates for the return are built in with the math calculated for you. Validations catch common mistakes before you submit. An account is free to create with no credit card needed, and you pay $39.95 when you file. See pricing if you also file other quarters.
FAQ
Our new plan only ran for two months. Can we skip the fee this year?▼
No. IRS Q&A 12 says the fee applies to a short plan year, which is any plan year of fewer than 12 months. The IRS sources do not set a minimum length.
Should we reduce the rate because the year was short?▼
No. The IRS formula is the average lives covered during the short plan year times the applicable dollar amount for that plan year. The IRS example applies the full rate to a nine-month year.
Our plan ended for good partway through the year. Is that a short plan year?▼
The IRS Q&A gives new plans and changed plan years as examples, and defines a short plan year as one spanning fewer than 12 months. It does not separately discuss a terminated plan, so confirm your facts with an adviser.
Does this rule apply to insurers too?▼
The short plan year Q&As are written for applicable self-insured health plans. Our IRS sources do not give the same discussion for short policy years.
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; 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.
