What Is a PCORI Fee? Understanding Form 720 Filing Requirements
If you sponsor a self-insured health plan, run a Health Reimbursement Arrangement (HRA), or manage benefits for a growing business, you have likely come across the term "PCORI fee" and the IRS Form 720 that goes along with it. With the July 31, 2026 deadline approaching, understanding exactly what this fee is, who owes it, and how to report it correctly can save your company from costly IRS penalties. This guide explains everything in plain language.
What Is a PCORI Fee?
The PCORI fee is a small annual federal charge that helps fund the Patient-Centered Outcomes Research Institute, an independent nonprofit created under the Affordable Care Act (ACA). The institute uses these funds to support clinical research that improves the quality and effectiveness of healthcare decisions made by patients, doctors, and policymakers.
Although the fee was originally scheduled to end in 2019, Congress extended it through the Further Consolidated Appropriations Act of 2020. The PCORI fee now applies to plan years ending on or before September 30, 2029. It is reported and paid using IRS Form 720, the Quarterly Federal Excise Tax Return, even though most filers only deal with it once a year.
Who Must Pay the PCORI Fee?
The party responsible for paying the PCORI fee depends on whether the health plan is fully insured or self-insured. Insurance carriers handle the fee for fully insured plans, while employers shoulder the responsibility for self-funded arrangements.
Table 1: Who Is Responsible for PCORI Fees?
| Plan Type | Responsible Party | Files Form 720? |
|---|---|---|
| Fully Insured Group Health Plan | Insurance Carrier | Carrier files |
| Self-Insured Health Plan | Employer / Plan Sponsor | Yes |
| Health Reimbursement Arrangement (HRA) | Employer | Yes |
| Individual Coverage HRA (ICHRA) | Employer | Yes |
| Qualified Small Employer HRA (QSEHRA) | Small Employer | Yes |
| Multiple Employer Welfare Arrangement (MEWA) | Plan Sponsor | Yes |
If your business offers any type of HRA or operates a self-insured arrangement, the responsibility falls directly on you. For a closer look at filing eligibility, see our guide on who is required to pay the PCORI fee.
PCORI Fee Rates for the 2026 Filing Season
The IRS adjusts the PCORI fee each year for inflation. For the 2026 filing season, two different rates apply, depending on when your plan year ended in 2025. The rates below come from IRS Notice 2025-61.
Table 2: 2026 PCORI Fee Rates (Due July 31, 2026)
| Plan Year End Date | Fee Per Covered Life | Filing Deadline |
|---|---|---|
| January 1, 2025 to September 30, 2025 | $3.47 | July 31, 2026 |
| October 1, 2025 to December 31, 2025 | $3.84 | July 31, 2026 |
| Calendar Year Plans (ending Dec 31, 2025) | $3.84 | July 31, 2026 |
So if your plan year ended on December 31, 2025, multiply your average number of covered lives by $3.84 to calculate your total PCORI fee owed.
How to File PCORI Fees Using Form 720
Even though Form 720 is technically a quarterly return, PCORI fees are paid only once per year and reported on the second-quarter Form 720, due by July 31. The fee goes on Part II, IRS No. 133.
Here is the basic process:
- Download the latest version of Form 720 from the IRS website.
- Complete the top section with your business name, EIN, and address.
- Mark the quarter ending June 30, 2026.
- Go to Part II, locate IRS No. 133, and enter your number of covered lives.
- Multiply covered lives by the applicable rate to determine the fee.
- Sign, submit, and pay through EFTPS or by check with Form 720-V.
For a faster experience, you can file your PCORI fee online through our IRS-authorized platform in minutes. Need a more detailed walkthrough? Read our complete step-by-step PCORI filing guide.
Three IRS-Approved Methods to Count Covered Lives
The IRS allows self-insured plan sponsors to choose one of three counting methods:
- Actual Count Method: Add up the covered lives on each day of the plan year and divide by the total number of days.
- Snapshot Method: Count covered lives on one date per quarter (or multiple consistent dates) and average them.
- Form 5500 Method: Use the participant counts already reported on your annual Form 5500 filing.
You may change methods year to year, but you must stick with the same method throughout a given plan year.
What Happens If You File Late?
Missing the July 31 deadline triggers IRS penalties under IRC Section 6651. The failure-to-file penalty is typically 5% of the unpaid fee per month, capped at 25%, plus interest. Late payments add another 0.5% per month. If you missed a previous deadline, our Form 720 late filing service can help you get back on track, and you can review the complete Form 720 penalties and interest structure here.
Form 720 vs Form 8849: Know the Difference
While Form 720 is used to report and pay excise tax liabilities (including PCORI fees), the 8849 form is used to claim refunds on overpaid or nontaxable excise taxes. Most PCORI filers will only need Form 720, but if you overpaid in a previous year, the 8849 form is the way to recover those funds. For a deeper comparison, see our Form 720 vs Form 8849 guide.
Frequently Asked Questions
What is a PCORI fee in simple terms?
A PCORI fee is a small annual federal fee that health insurers and self-insured plan sponsors pay to fund medical research aimed at improving patient healthcare decisions.
What is the PCORI fee amount for 2026?
The fee is $3.47 per covered life for plan years ending between January 1 and September 30, 2025, and $3.84 per covered life for plan years ending between October 1, 2025 and September 30, 2026.
When are PCORI fees due in 2026?
PCORI fees for plan years ending in 2025 are due by July 31, 2026, reported on Form 720 for the quarter ending June 30, 2026.
Is the PCORI fee tax deductible?
Yes. The IRS treats PCORI fees as an ordinary and necessary business expense for plan sponsors, so they are generally deductible.
Can I e-file the PCORI fee?
Yes. You can e-file Form 720 quickly and securely through an IRS-authorized provider like eFileExcise720, often in under five minutes.