On June 26, 2026, the IRS updated Form 720 to reflect the correct Patient-Centered Outcomes Research Institute (PCORI) fee amounts and plan year ending dates for plans ending in the 2025 calendar year.
The updated form now correctly reflects:
- $3.47 per covered life on Line 133(c) for plan years ending January 1, 2025 – September 30, 2025
- $3.84 per covered life on Line 133(d) for plan years ending October 1, 2025 – December 31, 2025
Employers and plan sponsors can now complete and submit Form 720 when PCORI fees apply.
Who Must Pay PCORI Fees?
PCORI fees generally apply to:
- Self-funded medical plans, including level-funded plans
- Health Reimbursement Arrangements (HRAs)
- Individual Coverage HRAs (ICHRAs)
- Qualified Small Employer HRAs (QSEHRAs)
- Most Medical Expense Reimbursement Plans (MERPs)
Fully insured medical plans are not required to file or pay directly—the insurance carrier handles the fee.
Plans that are considered excepted benefits are also exempt, including:
- Stand-alone dental plans
- Stand-alone vision plans
- Qualified Health FSAs
- HSAs
Background
The Affordable Care Act (ACA) requires certain health plans to pay a PCORI fee that supports research on patient-centered healthcare outcomes.
For fully insured plans, the insurer includes and submits the fee. For self-funded and level-funded plans, the employer or plan sponsor is responsible for calculating, reporting, and paying the fee directly to the IRS.
Although the fee is based on the plan year, it is paid annually using the second-quarter IRS Form 720.
Payment deadline:
PCORI fees for plan years ending during 2025 must be submitted by July 31, 2026.
PCORI Fee Amounts for 2025 Plan Year Ends
| Plan Year End Date | PCORI Fee | Form 720 Line |
| January–September 2025 | $3.47 per covered life | Line 133(c) |
| October–December 2025 | $3.84 per covered life | Line 133(d) |
Counting Covered Lives
For self-funded and level-funded plans, covered lives generally include:
- Employees/former employees enrolled in the plan
- Spouses
- Dependents
For HRAs, ICHRAs, QSEHRAs, and MERPs:
- Only the employee/former employee receiving coverage is counted
- Spouses and dependents are not included
Employers may use one of the IRS-approved calculation methods and may choose the method that results in the lowest fee.
Employer Action Steps
1. Confirm Applicability
- Determine whether the plan is self-funded, level-funded, or includes an HRA/ICHRA arrangement.
- Confirm the plan year end date.
- Use the correct fee amount based on the plan year end date.
2. Calculate the Fee
- Obtain enrollment reports from vendors.
- For self-funded plans, collect employee enrollment by tier and total covered lives.
- For HRAs/ICHRAs, count covered employees only.
- Apply an IRS-approved calculation method.
3. File and Pay
- Complete IRS Form 720 using the updated version.
- Confirm Line 133(c) reflects $3.47 and Line 133(d) reflects $3.84.
- Include the organization’s legal name, FEIN, address, and filing quarter/year (for example, June 2026 for 2025 plan years).
- Submit payment by July 31, 2026.
- Retain supporting documentation, including enrollment counts, calculation method, and proof of payment.
Potential Penalties
Failure to properly calculate, file, or pay PCORI fees may result in:
- Failure-to-file penalty: 5% of unpaid fees per month (up to 25%)
- Failure-to-pay penalty: 0.5% of unpaid fees per month (up to 25%)
- Possible minimum penalty of the lesser of $100 or 100% of the tax owed
- Interest accruing on unpaid balances and penalties
While PCORI fees are typically a relatively small expense, penalties and interest can accumulate over time. Plan sponsors remain responsible for ensuring filings are accurate, even when calculations are prepared by a third-party administrator or advisor.