Do Fully Insured Plans Pay PCORI Fees in 2026? A Complete Guide

If you are an employer trying to figure out your PCORI fee obligations for 2026, you are not alone. One of the most common questions HR managers and benefits administrators ask is: do fully insured plans pay PCORI fees in 2026, and if so, who is actually responsible for writing that check?

The short answer is yes, fully insured plans are subject to the PCORI fee in 2026. But here is the key distinction: when you have a fully insured health plan, your insurance carrier is the one responsible for paying and reporting the fee. As an employer, you do not file Form 720 or send anything directly to the IRS for a fully insured plan. However, understanding exactly where your obligations begin and end is crucial, especially if you also maintain a Health Reimbursement Arrangement (HRA) alongside that fully insured plan.

This guide walks you through everything you need to know, with clear tables and plain-language explanations.

What Is the PCORI Fee?

The PCORI fee (Patient-Centered Outcomes Research Institute fee) was created by the Affordable Care Act (ACA) to fund comparative clinical effectiveness research. The goal is to generate better health information that helps patients, doctors, and employers make smarter healthcare decisions.

The fee applies to both fully insured and self-insured health plans. It is calculated based on the average number of lives covered under a plan during the plan year, multiplied by a per-covered-life dollar rate that the IRS adjusts annually. The fee is scheduled to remain in effect through 2029, following a congressional extension under the Consolidated Appropriations Act, 2020.

The fee is reported and paid annually using IRS Form 720, Quarterly Federal Excise Tax Return, even though it is technically an annual obligation. It is always reported in the second quarter (for the period ending June 30), and the payment deadline is July 31 of the following year.

For example, the PCORI fee deadline for 2026 will be July 31, 2026, for the applicable plan years being reported.

Fully Insured vs. Self-Insured: Who Pays the PCORI Fee in 2026?

This is where most of the confusion comes from. The table below breaks it down clearly:

In plain terms: if your employees are covered by a group health plan from an insurance carrier, that carrier is responsible for paying the PCORI fee. The fee is typically built into the premiums you pay, but the administrative and filing burden falls on the insurer, not on you as the employer.

The Employer's Role: No Direct Filing for Fully Insured Plans

Under IRS rules established by the ACA, issuers of specified health insurance policies (meaning insurance carriers) are required to pay the PCORI fee for fully insured health plans. This responsibility sits with the carrier under Internal Revenue Code Section 4375.

For employers with fully insured plans, the practical takeaway is straightforward: you do not need to file Form 720 for your group health plan. Your insurer handles that. The cost of the PCORI fee may be reflected in your premiums, but the IRS paperwork is not your job.

This is a meaningful operational difference compared to self-insured employers, who must calculate their own covered lives, complete Form 720, and submit payment directly to the IRS by July 31, 2026.

The HRA Exception: When Fully Insured Employers Do Owe PCORI

There is one important scenario where a fully insured employer does have a direct PCORI fee obligation: when the employer also sponsors a Health Reimbursement Arrangement (HRA) that is integrated with the fully insured medical plan.

Under IRS guidance, an HRA is treated as a separate self-insured health plan for PCORI purposes. So if you offer a fully insured group medical plan and an HRA alongside it, you owe the PCORI fee on the HRA separately, even though your insurer is covering the main plan.

The good news: the IRS provides a special counting rule. When an HRA is integrated with a fully insured plan, the employer only needs to count each HRA participant once, not their dependents or beneficiaries. This prevents double-counting and significantly reduces the fee burden.

Similarly, Qualified Small Employer HRAs (QSEHRAs) and Individual Coverage HRAs (ICHRAs) are also subject to the PCORI fee, with the employer responsible for reporting and paying via Form 720.

PCORI Fee Rates for 2026: What Is the Dollar Amount?

The IRS released IRS Notice 2025-61 in late 2025, setting the updated PCORI fee rate for plan years ending on or after October 1, 2025, and before October 1, 2026. The rate is $3.84 per covered life, up from $3.47 the previous year, representing the largest single-year increase since the fee was introduced.

For employers on a standard calendar year plan ending December 31, 2025, this $3.84 rate applies and payment is due by July 31, 2026 via Form 720.

Note: Plan years ending between January and September 2026 are not due until July 31, 2027. The fee is always determined by when your plan year ends, not when it begins.

Self-Insured Plans: How to Calculate and File the PCORI Fee

If you sponsor a self-insured health plan (including level-funded plans and HRAs), you are responsible for calculating the average number of covered lives and filing Form 720. The IRS approves three methods for this calculation:

• Actual Count Method: Add the total number of covered lives for every day of the plan year, then divide by the number of days in the plan year.
• Snapshot Method: Count covered lives on one consistent date each quarter (or each month), then average those counts. A simplified variant lets you count employees with self-only coverage plus employees with other-than-self-only coverage multiplied by 2.35.
• Form 5500 Method: Use the participant counts from the beginning and end of the plan year as reported on Form 5500. If only single coverage is offered, divide the total by 2. This method requires the Form 5500 to be filed no later than the PCORI fee due date.

Regardless of method, COBRA participants and retirees must be counted. If you have a short plan year, there is no pro-rating; you simply count lives across the actual days or months of the short year.

For multiple self-funded plans with the same plan year, you can treat them as a single plan and count each unique covered life only once. For instance, if you have a self-funded medical plan and an integrated HRA, you do not have to count the same employees twice.

How to File the PCORI Fee Using Form 720

The PCORI fee is reported on IRS Form 720 (Quarterly Federal Excise Tax Return), Line 133. Self-insured plans use Line 133(c) for plan years ending January through September, and Line 133(d) for plan years ending October through December. The filing is always submitted as the second-quarter return, regardless of when your plan year ends.

If you do not otherwise file quarterly excise taxes, you may file Form 720 only for the second quarter each year just to report the PCORI fee. eFile Excise 720 is an IRS-authorized e-file provider that makes this process fast and straightforward. You can file your PCORI fee online via Form 720 in minutes, with built-in error checks to keep you compliant.

If you overpaid excise taxes or need a refund for any related filing, the 8849 form (Form 8849, Claim for Refund of Excise Taxes) is the tool used to reclaim amounts previously reported on Form 720. While Form 8849 is not used directly for PCORI, it is relevant for employers managing broader excise tax obligations alongside their health plan filing.

Penalties for Missing the PCORI Fee Deadline

Missing the July 31, 2026 deadline can be costly. Since the PCORI fee is classified as an excise tax, Code Section 6651 governs penalties:

• Failure to file Form 720: 5% of the excise tax due for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax.
• Failure to pay the fee: 0.5% of the unpaid tax per month, up to 25%.
• Interest: Charged in addition to penalties on any unpaid amounts.

If you missed a prior year, file a separate Form 720 for each missed plan year rather than combining them on a single return. You can also file a Form 720-X (Amended Quarterly Federal Excise Tax Return) to correct errors in a previously filed Form 720.

Penalties may be waived if the plan sponsor demonstrates reasonable cause and the failure was not due to willful neglect. For further detail on penalty calculations, see our Form 720 Penalties and Interest guide.

Which Health Plans Are Exempt from the PCORI Fee?

Not every health arrangement is subject to PCORI. The following are generally exempt:

• Most health Flexible Spending Accounts (FSAs) that qualify as excepted benefits
• Stand-alone dental and vision plans that qualify as excepted benefits
• Employee Assistance Programs (EAPs) with limited or no medical benefits
• Accident-only or disability income policies

Retiree-only plans and HRAs, however, are not exempt. They are subject to the fee even if the employer's main medical plan is fully insured. Always confirm your specific plan type with your benefits advisor or tax counsel when in doubt.

Frequently Asked Questions

The Bottom Line

So, do fully insured plans pay PCORI fees in 2026? Yes, but the obligation rests with the insurance carrier, not the employer. If your company offers a fully insured group health plan, you can breathe easy knowing your insurer is handling the Form 720 filing and the $3.84 per covered life fee.

Where employers with fully insured plans do need to take action is when they also maintain an HRA. In that case, you have a direct PCORI filing responsibility for the HRA participants, with the same July 31, 2026 deadline.

For self-insured plan sponsors and HRA administrators, eFile Excise 720 simplifies the entire process. As an IRS-authorized e-file provider, we help you calculate covered lives, complete Form 720 accurately, and submit your PCORI fee on time, all in just a few minutes.

File your PCORI fee online today and stay fully compliant with the July 31, 2026 deadline. If you have questions, visit our FAQs or reach out to our support team at support@efileexcise720.com.