Employers who sponsor self-insured (or level funded) group health plans must report and pay the required PCORI (Patient-Centered Outcomes Research Institute) fees annually via IRS Form 720 (Instructions). Here’s a detailed look at what you need to know about the 2025 PCORI fees and their associated deadlines.
What are PCORI Fees?
PCORI fees are a small charge that certain health plans must pay each year to help fund important medical research as required under the Affordable Care Act (ACA). This research evaluates the effectiveness of medical treatments, procedures, and strategies to improve patient outcomes.
2025 PCORI Fee Amounts
The annual fee is paid using quarterly excise tax Form 720 and must be remitted to the IRS no later than July 31st of the year following the last day of the plan year, which includes calendar-year plans. This fee is subject to annual adjustments based on inflation.
• Plan years ending January through September 2024: $3.22 per covered life
• Plan years ending October through December 2024: $3.47 per covered life
Who Needs to Pay PCORI Fees?
Medical Plans
Fully Insured plans: Employers with fully insured group health plans do not pay PCORI fees directly since they are already assessed this fee in their monthly premium payments by their health insurance carriers.
Self-Funded (or Level Funded) plans: Employers with these types of plans are responsible for filing and paying PCORI fees annually.
If you don’t sponsor a self-insured (or level funded) medical plan, but you offer an HRA or FSA (and it is not excepted) then PCORI fees apply to you as well. See below.
Health Reimbursement Accounts
The employer should look to the integrated group health plan to determine reporting requirements.
Integrated With Fully Insured Coverage: The employer must pay the PCORI fee for the self-insured HRA, calculated by counting one covered life for each employee with an HRA while the insurer pays the PCORI fee on the individuals (including dependents) covered under the insured plan.
Integrated With Self-Insured (Level Funded) Coverage: Count each individual covered by both plans only once. Add to this any individuals covered by only one plan using the counting method used for other individuals in that plan.
An HRA is an excepted benefit if it only reimburses for limited-scope dental and vision expenses or long-term care coverage and is not integrated with a group health plan.
Flexible Savings Accounts
Most health flexible spending arrangements (FSA) are considered “excepted” benefits and are excluded from PCORI fees as long as the employer also offers traditional medical coverage to FSA participants and the maximum annual FSA reimbursement is limited to the greater of the participant’s contribution plus $500 or twice the participant’s contribution.
Other Plans
Health Savings Accounts (HSA) are not subject to the PCORI fee requirements since HSAs are not group health plans, but rather individual accounts. The PCORI fee also does not apply to most dental and vision coverage since they are “excepted benefits,” exempt from PCORI fee requirements.
Deadlines for Payment
The PCORI fee is due by July 31st of the calendar year following the last day of the plan year. For instance, for plan years ending in 2024, the fee would be due by July 31, 2025.
Calculating PCORI Fees
Employers calculate the PCORI fee using one of the following methods:
• Actual Count Method: Count the number of lives covered under the plan for each day of the plan year.
• Snapshot Method: Use the snapshot dates (such as the first or last day of each quarter) to determine the average number of lives covered under the plan.
Reporting and Payment
Employers must report and pay PCORI fees using IRS Form 720 (Quarterly Federal Excise Tax Return). This form is used for various excise taxes, including the PCORI fees, and must be filed annually.
Importance of Compliance
Staying on top of PCORI fee requirements might not be the most exciting part of managing a health plan, but it’s definitely important. Missing the deadline or misreporting can lead to penalties, and no one wants to deal with that kind of headache.
Plus, these fees support research that helps make healthcare better for everyone. So by keeping up with your PCORI obligations, you’re not just checking a box—you’re also contributing to smarter, more effective care for patients across the country.
Bottom line? Mark your calendar, file that Form 720, and keep your plan in good standing. It’s one less thing to worry about. And if you have questions or need assistance, don’t hesitate to reach out to our compliance team (kristin.young@thesilbermangroup.com) at Silberman Group!
