As a reminder, Patient-Centered Outcomes Research Institute (PCORI) fees are due by July 31, 2026. These fees help fund the Patient Centered Outcomes Research Institute – a non-profit organization created under the Affordable Care Act to conduct research to help patients and caregivers make better decisions for their specific needs and health care outcomes. It also performs research related to clinical effectiveness.
- You must pay this fee if you sponsor a self-funded health plan, a level-funded health plan or a health reimbursement arrangement plan (HRA).
- Note: Flexible Spending Accounts (FSAs) are exempt if funded entirely by employee elections or are Limited Purpose FSAs (reimbursing dental and vision expenses only).
- If there is an employer contribution to an FSA, the FSA will still be exempt if the employer contribution is limited to the lesser of the employee’s contribution or $500 per year.
- Note: Flexible Spending Accounts (FSAs) are exempt if funded entirely by employee elections or are Limited Purpose FSAs (reimbursing dental and vision expenses only).
- Employers sponsoring fully insured plans will have their PCORI fees handled by the insurance carrier.
This year, employers will pay as follows:
- For plan years ending after September 30, 2025, but before October 1, 2026, the PCORI fee will be $3.84 per covered person (including COBRA participants and retirees, if applicable).
- For plan years ending after September 30, 2024, and before October 1, 2025, the PCORI fee will be $3.47 per covered person (including COBRA participants and retirees, if applicable).
- For plan years ending after September 30, 2023, and before October 1, 2024, the PCORI fee will be $3.22 per covered person (including COBRA participants and retirees, if applicable).
You will use IRS Form 720 for the second calendar quarter to report and pay the PCORI fee. On page 2, under Part II, you will designate the average number of covered lives under your plan. You will multiply that by the applicable fee to determine the total fee owed to the IRS.
To calculate the average number of covered lives, you will use one of the following three methods:
- Actual count method – You will take the total number of lives covered (employees and their covered family members, or only employees if the plan is an HRA) on each day of the plan year and divide it by the total number of days in the plan year.
- Snapshot method – Take the total number of lives covered (employees and their covered family members, or only employees if the plan is an HRA) on one or more dates during each of the four calendar quarters and divide that total by the number of dates on which you made a count. Employers must use the same number of dates in each quarter, and the dates in each quarter must be within 3 days of the dates for corresponding quarters.
- Form 5500 method – If you filed a 5500 for your medical plan for the 2025 plan year, you may use the participant counts from that 5500.
- Plans with only self-only coverage – Add the total number of participants at the beginning and the end of the plan year and divide by 2 to get the average number for the year.
- Plans with self-only and dependent coverage – Add the total number of participants at the beginning and the end of the plan year. (You cannot use this method for HRA plans.)
Your completed Form 720, your payment voucher and your check made out to “United States Treasury” should be mailed to:
Department of the Treasury
Internal Revenue Service
Ogden, UT
84201-0009