7 PCORI Fee Filing Errors to Avoid When Completing Form 720
Every year, thousands of employers and plan sponsors make avoidable mistakes when reporting the PCORI Fee on IRS Form 720. These PCORI Fee Filing Errors can result in IRS penalties, delayed processing, or outright rejection — all of which cost you time and money.
Whether you're filing for the first time or you've done it before, this guide walks you through the seven most common PCORI Fee Filing Errors in 2026 — and exactly how to avoid each one.
What Is the PCORI Fee and Who Must File?
The PCORI Fee (Patient-Centered Outcomes Research Institute fee) is a federal excise tax established under the Affordable Care Act (ACA). It funds comparative effectiveness research to help patients and providers make better healthcare decisions.
Who is responsible?
- Self-insured health plan sponsors (employers): Must calculate and report the fee themselves using IRS Form 720.
- Fully insured plan sponsors: The insurance carrier handles the fee — no employer action needed.
For plan years ending in 2025, the 2026 PCORI Fee rate is $3.84 per covered life (up from $3.47). The filing deadline is July 31, 2026, reported under Part II of Form 720 for the second quarter.
PCORI Fee Rates at a Glance (2026)
| Plan Year End Date | Applicable PCORI Fee Rate | Filing Deadline |
|---|---|---|
| Jan 1 – Sep 30, 2025 | $3.47 per covered life | July 31, 2026 |
| Oct 1 – Dec 31, 2025 | $3.84 per covered life | July 31, 2026 |
| Jan 1 – Dec 31, 2026 | TBD (IRS Notice) | July 31, 2027 |
7 PCORI Fee Filing Errors to Avoid on Form 720
Error 1: Using an Outdated Version of Form 720
The IRS updates Form 720 regularly. Using last year's version — even if it looks identical — can lead to automatic rejection. The correct form for the 2026 PCORI Fee filing is the Form 720 (Rev. June 2026), specifically for the second calendar quarter (Q2).
How to avoid it: Always download the most current Form 720 directly from IRS.gov, or use an IRS-authorized e-file platform like eFile Excise 720 that automatically uses the latest version.
Error 2: Entering Incorrect Business or Tax Identification Details
A mismatched EIN (Employer Identification Number), business name, or address is one of the most frequent PCORI Fee Filing Errors. Even a single digit typo in your EIN can cause the IRS to reject or misapply your payment.
How to avoid it: Double-check your EIN against your official IRS correspondence before submitting. If your business name has changed recently, ensure your IRS records have been updated first.
Error 3: Applying the Wrong PCORI Fee Rate
There are two different PCORI rates applicable in the 2026 filing cycle — $3.47 and $3.84 — depending on when your plan year ended. Applying the wrong rate is a costly mistake that may trigger IRS notices.
| Plan Year Ended | Correct Rate |
|---|---|
| Before October 1, 2025 | $3.47 per covered life |
| October 1, 2025 or later | $3.84 per covered life |
How to avoid it: Identify your exact plan year end date before choosing the rate. If you're unsure, consult your plan documents or benefits administrator. File PCORI Fee online with eFile Excise 720 — our system automatically applies the correct rate based on your plan year.
Error 4: Miscounting Covered Lives
The PCORI Fee is calculated by multiplying the average number of covered lives by the applicable rate. Many employers incorrectly count only employees and forget to include dependents, COBRA participants, and retirees — all of whom must be counted.
There are three IRS-approved methods for calculating covered lives:
- Actual Count Method — Add total covered lives for every day of the plan year, then divide by the number of days.
- Snapshot Method — Add total lives covered on one date per quarter, divide by four.
- Form 5500 Method — Use participant data reported on Form 5500.
How to avoid it: Choose your calculation method consistently from year to year and make sure you're counting all eligible individuals — not just active employees.
Error 5: Selecting the Wrong Plan Year Period
Form 720 requires you to identify the correct policy or plan year. Choosing the wrong plan year — especially during a transition period or short plan year — leads to misapplied fees and potential penalties.
How to avoid it: Confirm your plan's exact start and end dates with your HR or benefits team before filing. If you had a short plan year (for example, transitioning from a fiscal plan year to a calendar year), both periods may require separate PCORI Fee entries.
Error 6: Missing the July 31 Deadline
The PCORI Fee is due once a year — by July 31. There are no extensions available for this deadline. Late filing triggers failure-to-file penalties plus interest under IRC Section 6651. For context, the IRS can assess penalties of 5% per month on unpaid taxes.
How to avoid it: Mark July 31, 2026 on your calendar now. If you're concerned about Form 720 late filing, visit our late filing page to understand your options. E-filing is the fastest way to ensure timely submission with immediate IRS confirmation.
Error 7: Filing on Paper Instead of E-Filing
Manual paper filings are subject to postal delays, lost mail, illegible entries, and human error — all of which are entirely avoidable. Paper returns also take significantly longer to process, leaving you without confirmation until weeks later.
How to avoid it: E-file your PCORI Fee through an IRS-authorized provider like eFile Excise 720. You'll get real-time IRS acknowledgment, built-in error checks, and a secure digital record — all in under 5 minutes.
Why Avoiding These PCORI Fee Filing Errors Matters
Penalties for PCORI Fee Filing Errors are no small matter. Under the IRS rules:
- Failure to file: 5% of unpaid tax per month (up to 25%)
- Failure to pay: 0.5% per month on unpaid balance
- Inaccurate information: May trigger audits and additional penalties
Beyond penalties, errors delay IRS processing and can create downstream compliance problems. Staying error-free protects your organization and demonstrates good-faith compliance.
If you also handle fuel tax credits or refund claims, check out Form 8849 online filing — a related excise tax form that may apply to your organization.
File Your PCORI Fee the Right Way with eFile Excise 720
At eFile Excise 720, we're an IRS-authorized e-file provider that makes Form 720 filing fast, accurate, and stress-free. Our platform:
- Automatically selects the correct PCORI Fee rate
- Validates your EIN and business details
- Guides you through covered lives calculation
- Submits directly to the IRS with real-time confirmation
- Keeps your filing history secure for future reference
File Your PCORI Fee Online Now →
Frequently Asked Questions (FAQs)
Q1: What is the PCORI Fee for 2026?
The PCORI Fee for plan years ending on or after October 1, 2025 through September 30, 2026 is $3.84 per covered life. For plan years ending before October 1, 2025, the rate is $3.47.
Q2: Who needs to file the PCORI Fee on Form 720?
Employers and plan sponsors with self-insured health plans or HRAs must file Form 720 and pay the PCORI Fee. Employers with fully insured plans are not required to file — the insurance carrier handles it.
Q3: When is the PCORI Fee due in 2026?
The deadline is July 31, 2026. This applies to all plan years that ended during calendar year 2025.
Q4: Can I get an extension for PCORI Fee filing?
No. The IRS does not grant extensions for the PCORI Fee. Filing after July 31 may result in late penalties and interest. Learn more on our Form 720 Late Filing page.
Q5: Do dependents count toward covered lives for the PCORI Fee?
Yes. Covered lives include employees, their dependents, retirees, and COBRA participants enrolled in the plan during the plan year.
Q6: Is e-filing required for Form 720?
E-filing is not legally mandated, but it is strongly recommended. Paper filings are prone to errors and delays. E-filing through an IRS-authorized provider like eFile Excise 720 gives you immediate confirmation and reduces error risk significantly.
Q7: What is Form 8849 and how does it relate to Form 720?
Form 8849 is used to claim refunds on certain federal excise taxes — including fuel taxes reported on Form 720. If your organization overpaid excise taxes, Form 8849 may allow you to recover those funds.
Q8: What happens if I apply the wrong PCORI Fee rate?
Using an incorrect rate — either too high or too low — can lead to underpayment penalties or a need to file an amended return. Always verify your plan year end date before filing.
Final Thoughts
The PCORI Fee is a routine annual obligation, but even small mistakes on Form 720 can lead to big consequences. By understanding and avoiding these 7 PCORI Fee Filing Errors, you protect your business from IRS penalties and keep your benefits compliance on solid ground in 2026.
The smartest move? E-file with eFileExcise720 — an IRS-authorized platform built for accuracy, speed, and peace of mind.