- with Senior Company Executives and HR
Key Takeaways
- The PCORI fee for the 2025 plan year is due July 31, 2026, reported and paid using IRS Form 720, and the applicable rate has increased to $3.84 per covered life as set by IRS Notice 2025-61.
- For insured health plans, the insurer bears the filing obligation, while for applicable self-insured health plans, including self-insured major medical plans and health reimbursement arrangements (HRAs), the plan sponsor is responsible for filing and payment.
- Excepted benefits – such as most health flexible spending arrangements (FSAs), standalone dental or vision plans and certain employee assistance programs (EAPs) – are not subject to the PCORI fee, and employers should consult the IRS chart to confirm which plans require a filing.
The annual filing (and fee payment) for applicable self-insured health plans and specified health insurance policies used to fund the Patient-Centered Outcomes Research Institute (the PCORI fee) is due by Friday, July 31, 2026. Internal Revenue Service (IRS) Form 720, Quarterly Federal Excise Tax Return, is used to report and pay (in Part II, IRS No. 133, on page 2) the annual PCORI fee.
The filing rules have not changed, although the applicable rate has increased to $3.84 per covered life (announced via IRS Notice 2025-61).
For an insured plan, the filing obligation falls on the insurer. However, for an “applicable self-insured health plan,” the filing obligation lies with the plan sponsor. Applicable self-insured health plans include self-insured major medical coverage and health reimbursement arrangements (HRAs) for both employees and retirees, but do not include “excepted benefits” (e.g., most health flexible spending arrangements (health FSAs), standalone dental or vision plans, and certain employee assistance programs (EAPs) that do not provide significant benefits in the nature of medical care, etc.). The IRS provides a helpful chart to help identify the plans to which the PCORI fee applies.
Who Must File the PCORI Fee and Which Plans Are Subject to It?
The PCORI fee is currently calculated at $3.84 times the average number of lives covered for the plan year (determined using one of the IRS’ prescribed counting methods; see the IRS PCORI page here for information about the counting methods). This current rate will apply to a 2025 calendar plan year. However, for a non-calendar plan year ending before October 1, 2025, the prior year’s PCORI fee rate of $3.47 will apply on this filing (and will increase to $3.84 on next year’s filing).
How Is the PCORI Fee Calculated and Applied to Insured, Self-Insured and Integrated HRA Plans?
For example, for an employer that in 2025 sponsored an insured major medical plan (policy operated on a calendar year plan year) that was integrated with an HRA (also operated on a calendar year), the insurer will have the filing obligation with respect to the average number of lives covered by major medical in 2025 (times $3.84) for the insured major medical, but the employer will also have a filing obligation with respect to the average number of lives covered by the HRA in 2025 (times $3.84), and both such filings are due July 31, 2026.
If the same employer in 2025 instead sponsored a self-insured major medical plan that was integrated with an HRA, that employer could generally treat the medical plan and HRA as a single applicable self-insured health plan for the purpose of counting the average number of covered lives (times $3.84, to determine the fee), and that filing is due July 31, 2026.
The current Instructions to Form 720 are available here, and the IRS website has a page dedicated to the PCORI fee, here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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