The Patient-Centered Outcomes Research Institute (PCORI) fee is an annual federal fee required under the Affordable Care Act. It helps fund research that evaluates the effectiveness of medical treatments and health outcomes.
What is a PCORI fee?
A PCORI fee is an annual fee imposed under the Affordable Care Act on issuers of fully insured health policies and sponsors of applicable self-insured health plans, and it helps fund the Patient-Centered Outcomes Research Institute’s medical research.
For more details: Patient-Centered Outcomes Research Institute
Who does the PCORI fee apply to?
The PCORI fee applies to:
Employers that sponsor self-insured health plans
Insurance carriers offering fully insured plans
💡 If you have a fully insured group health plan, your carrier pays the fee—you do not need to take action.
Does the PCORI fee apply to HRAs?
Yes. HRAs are considered self-insured health plans, so the employer is responsible for the PCORI fee.
This includes:
QSEHRA (Qualified Small Employer HRA)
ICHRA (Individual Coverage HRA)
Other employer-funded HRAs
What counts as a “covered life” for HRAs?
Unlike traditional medical plans, HRAs follow a simplified rule:
✅ Count:
Employees enrolled in the HRA
❌ Do NOT count:
Spouses
Dependents
Employees who waived participation
Former employees with no active coverage during the plan year
How much is the PCORI fee?
The fee is based on your average number of covered employees during the plan year.
Plan Year End Dates | Rate per Covered Life | Filing Due Date |
Oct 1, 2025 – Sep 30, 2026 | $3.84 | July 31, 2026 |
Oct 1, 2024 – Sep 30, 2025 | $3.61 | July 31, 2025 |
💡 The rate is adjusted annually for inflation.
Do I need to file?
You must file and pay if:
You had at least one enrolled employee during the plan year, and
Your average covered lives is greater than 0
You do NOT need to file if:
No employees participated in your HRA at any point during the plan year
Common scenarios
New HRA started mid-year
You still need to:
Calculate your average based on the months the plan was active
File and pay if the average is greater than 0
Employees enroll and terminate throughout the year
That’s expected. Your average will:
Include fluctuations
Be calculated using a consistent method (like snapshot)
You offered both ICHRA and a group plan
ICHRA → You must pay PCORI
Fully insured group plan → Carrier pays PCORI
Does the PCORI fee apply to QSEHRA and ICHRA?
Yes. According to the IRS, the PCORI fee applies to the sponsors of applicable self-insured health plans, which includes Qualified Small Employer HRAs (QSEHRA) and Individual Coverage HRAs (ICHRA).
For QSEHRA and ICHRA, the employer (plan sponsor) is responsible for reporting and paying the PCORI fee.
The fee is based on the average number of covered employees (not spouses or dependents) who have not waived coverage during the plan year.
This fee does not apply to fully insured health policies (those are handled by the insurer) but does apply to self-insured arrangements like QSEHRA and ICHRA.
What happens if I don’t file?
The IRS may assess:
Penalties for late filing
Interest on unpaid fees
If you believe you missed a filing, it’s best to consult a tax professional.
Does Take Command Health help?
Yes. Each June, we provide:
An estimate of your average covered employees
Educational guidance on how to complete Form 720
Note: Although Form 720 is a quarterly return, for PCORI, Form 720 is filed annually only, by July 31. If you have another reason to file Form 720 on a quarterly basis, you only need to report the PCORI fee on the second quarter form, due July 31st.
Learn more
Disclaimer
This article is for general informational purposes only and should not be considered tax advice. Please consult a licensed tax professional for guidance specific to your situation.