What Is the PCORI Fee? An Employer Guide

The PCORI fee is a small federal fee, charged once a year for each person covered by a health plan. Health insurers pay it on the policies they issue. Employers and other plan sponsors pay it on health plans they self-insure, including HRAs that aren't excepted benefits. If someone has just asked whether your company "did its PCORI filing," this is what they mean.

The name comes from the Patient-Centered Outcomes Research Institute. The Affordable Care Act created the fee to pay into the trust fund that finances the institute, which the IRS says helps patients, clinicians, purchasers, and policymakers make better-informed healthcare choices through comparative clinical effectiveness research. For an employer, the practical point is simple. It is a tax-type obligation, reported to the IRS, with a form and a deadline.

How much is the PCORI fee?

Not much per person. The fee equals the average number of lives covered during the year multiplied by a dollar rate. The IRS adjusts that rate yearly based on National Health Expenditures, and the rate that applies depends on the date your plan year ended.

For a made-up employer with an average of 200 covered lives and a plan year ending December 31, 2025, the fee is 200 × $3.84 = $768.00. The PCORI fee calculator will run your own numbers. "Covered lives" means people, not employees. An employee and a dependent child generally count as two.

When is it due, and on what form?

It is reported on IRS Form 720, the Quarterly Federal Excise Tax Return. Despite the name, you don't file every quarter just for this fee. You file only the second-quarter return, due July 31 of the year after the plan year ended. A plan year that ended in 2025 was due July 31, 2026. One ending in 2026 is due August 2, 2027, because July 31, 2027 is a Saturday.

You pay when the return is due, with no deposits required ahead of time. E-filing is available but not required. For the mechanics, see the PCORI fee filing guide.

Calling it a fee doesn't make it optional. If it applies to you, you report and pay it on that return, even if it is the only Form 720 your company ever files.

How can you tell if your company must file?

Work through these questions in order. The answers come from the IRS chart of coverage types.

1. Is your major medical plan self-insured? If any portion of the coverage is provided other than through an insurance policy, it counts as self-insured for this fee. You, as plan sponsor, owe it. Employers in a level-funded arrangement should read our post on level-funded plans.
2. Is it fully insured? Then the fee on that policy belongs to the insurer. You don't report it. Move to the next question.
3. Do you also offer an HRA? This is the one employers miss. An HRA is generally subject to the fee, and the plan sponsor pays it, unless the HRA qualifies as an excepted benefit. An HRA that pays deductibles and copays under an insurance policy has its own fee, separate from the policy.
4. Do you offer a health FSA? Most are not subject to the fee, since they meet the requirements to be treated as an excepted benefit. An FSA that doesn't meet them is subject to it. Our HRA and FSA guide goes further.
5. Is what you offer on the "no" list below? Then that coverage carries no fee.

Coverage for employees working and residing outside the United States has its own exclusion, and so do employee assistance, disease management, and wellness programs that don't provide significant medical care or treatment. If you're unsure which side of the line you are on, a broader check is on our do I need to file Form 720 page.

If you do owe the fee, what happens next?

Three things, and they don't take long once you know your plan year end date.

• Count your average covered lives. Self-insured sponsors use the actual count, snapshot, or Form 5500 method. A sponsor whose only self-insured coverage is an HRA or FSA may count one life per participant.
• Multiply by the rate for the date your plan year ended.
• File the second-quarter Form 720 and pay the fee by the due date.

Your next step is to file it online. EasyFile720 is an IRS-authorized e-file provider for Form 720, with guided filing from your business details through to submission. You enter your count, the rates are built in, and you sign electronically. It is free to create an account, and you pay $39.95 when you file. Start on the PCORI fee filing page with your plan year end date and your count in hand.

FAQ

Sources: IRS PCORI Questions and Answers; IRS chart of coverage types; IRS PCORI fee page; Instructions for 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.