If your business sponsors a level-funded or self-insured health plan, you may be responsible for a federal filing that catches many employers off guard: the PCORI fee. With the July 31, 2026, deadline approaching for plan years ending in 2025, now is the time to make sure your business is prepared.
What Is the PCORI Fee?
The Patient-Centered Outcomes Research Institute (PCORI) fee is a federal fee that helps fund research aimed at improving healthcare decision-making and patient outcomes. Congress established PCORI as part of the Affordable Care Act, and the fee remains in effect through plan years ending before October 1, 2029.
The fee applies to sponsors of applicable self-insured health plans and is reported annually to the IRS using Form 720, the quarterly federal excise tax return.
Who Is Responsible for Filing?
For level-funded (self-insured) health plans, the Plan Sponsor, typically the employer, is responsible for calculating, reporting, and paying the PCORI fee directly to the IRS. This is an important distinction for level-funded plan sponsors: unlike fully insured plans, where the insurance carrier handles the filing on your behalf, self-insured plan sponsors own the filing obligation entirely.
If you are unsure whether your plan qualifies as self-insured or level-funded, your benefits advisor or broker can help you confirm your plan type and filing requirements.
How Is the Fee Calculated?
The PCORI fee is calculated based on the average number of lives covered under the plan during the plan year, including enrolled employees and their covered dependents. The IRS provides several approved methods for calculating the average covered lives, and the applicable rate per covered life depends on when your plan year ends.
For plan years ending between January 2025 and September 2025, the applicable rate is $3.47 per covered life. For plan years ending between October 2025 and December 2025, the applicable rate is $3.84 per covered life. Your benefits advisor can help you identify the right calculation method for your plan.
What Is the Filing Deadline?
For plan years ending during 2025, the PCORI fee filing and payment deadline is July 31, 2026. The fee is reported annually using IRS Form 720, even though Form 720 is technically a quarterly return. Employers file once per year specifically for PCORI purposes, and payment is submitted directly to the IRS alongside the form.
Missing this deadline can result in penalties and interest, so it is important to calendar the date and prepare early.
Key Takeaways for Employers
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The PCORI fee applies to level-funded and self-insured health plan sponsors.
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The Plan Sponsor (employer) is responsible for filing and payment, not the insurance carrier.
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Filing is completed on IRS Form 720 and submitted directly to the IRS.
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The deadline for plan years ending in 2025 is July 31, 2026.
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The rate is $3.47 per covered life for plan years ending January through September 2025, and $3.84 per covered life for plan years ending October through December 2025.
Need Help?
If you have questions about your PCORI filing obligations or want to confirm whether your plan qualifies, the SandStone Insurance Partners team is here to help. Contact us today to connect with a group benefits advisor.
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Disclaimer: Coverage terms, conditions, and exclusions vary by policy and insurer. The above material is for general educational purposes only and is not a substitute for professional insurance or legal advice. The recommendation(s), advice, and contents of this material do not address every possible legal obligation, hazard, code violation, loss potential, or exception to best practice. Nothing in this material should be construed as establishing or confirming insurance coverage with SandStone Insurance Partners.
