PCORI Fees Are Due July 31, 2026: What Employers Need to Know
Selerix Compliance Corner Update!
The IRS has released Revenue Procedure 2025-32, announcing key cost-of-living adjustments for 2026 that affect several The If your organization sponsors a self-insured group health plan—including a Health Reimbursement Arrangement (HRA)—it’s time to prepare for another annual compliance deadline.
PCORI fees are due by July 31, 2026, and must be reported using the newly released IRS Form 720 (Rev. June 2026) for the second quarter of 2026.
While filing the fee is a once-a-year task, missing the deadline can create unnecessary compliance headaches. Here’s what employers should know.
What Is the PCORI Fee?
The Patient-Centered Outcomes Research Institute (PCORI) was created under the Affordable Care Act (ACA) to fund research evaluating the effectiveness of medical treatments, procedures, and preventive care.
To support that research, most employers sponsoring applicable self-insured health plans—and insurers issuing specified health insurance policies—must pay an annual PCORI fee for plan years ending on or before September 30, 2029, unless the requirement is extended.
Who Needs to Pay?
The responsibility depends on how your health plan is funded.
Self-insured plans
The employer is responsible for reporting and paying the fee.
This includes:
- Self-insured medical plans
- Health Reimbursement Arrangements (HRAs)
Fully insured plans
The insurance carrier is responsible for paying the fee.
Health FSAs
In general, health FSAs are not subject to the PCORI fee if they qualify as excepted benefits.
How Much Is the Fee?
The amount is based on the number of covered lives under the applicable plan.
For fees due July 31, 2026, the applicable rates are:
| Plan Year End | Fee Per Covered Life |
|---|---|
| January 1, 2025 – September 30, 2025 | $3.47 |
| October 1, 2025 – December 31, 2025 | $3.84 |
Example
- A plan running July 1, 2024 through June 30, 2025 owes $3.47 per covered life.
- A calendar-year 2025 plan owes $3.84 per covered life.
When Is the Deadline?
July 31, 2026
Employers sponsoring self-insured plans must:
- Complete IRS Form 720 (Rev. June 2026)
- Submit payment with Form 720-V
- Indicate the filing is for the second quarter of 2026
If this will be your organization’s final PCORI filing and you do not expect to owe additional Form 720 excise taxes in future quarters (for example, because the plan is terminating), you may check the “Final Return” box on Form 720.
One Small Accounting Reminder
Because the PCORI fee is assessed against the plan sponsor of a self-insured plan, it generally should not be included in the premium equivalent rate used when employees contribute toward the cost of coverage.
The good news? Employer payments of PCORI fees are generally tax deductible as an ordinary and necessary business expense.
How to Count Covered Lives
Employers sponsoring self-insured plans may choose one of three IRS-approved methods to determine the average number of covered lives.
1. Actual Count Method
Count the total number of covered lives each day of the plan year, then divide by the number of days in the year.
2. Snapshot Method
Take a count on one date (or an equal number of dates) in each quarter.
You may either:
- Count the actual number of covered lives, or
- Use the Snapshot Factor Method, counting:
- Self-only coverage = 1 life
- Coverage other than self-only = 2.35 lives
3. Form 5500 Method
If your plan files Form 5500, you may use participant counts reported there.
The calculation differs depending on whether the plan offers:
- Self-only coverage, or
- Coverage beyond self-only
The IRS provides specific calculation rules for each approach.
Special Rule for HRAs
If you’re calculating the fee for a Health Reimbursement Arrangement (HRA), there is a simplified counting rule.
An employer may count each HRA participant as one covered life without counting spouses, dependents, or other beneficiaries separately.
If the HRA shares the same plan year as another self-insured health plan sponsored by the employer, participants enrolled in both plans only need to be counted once when determining the applicable PCORI fee.
Key Takeaways
Before July 31, employers sponsoring self-insured health plans should:
- Review which health plans are subject to the PCORI fee.
- Determine the correct fee based on the applicable plan year.
- Calculate average covered lives using one of the approved IRS methods.
- File IRS Form 720 (Rev. June 2026) and submit payment by July 31, 2026.
A little preparation now can help ensure this annual filing is completed accurately and on time.
Partner with an ACA expert to ensure these updates do not go missed when reporting season comes. Talk to one of our ACA experts to get started.
Disclaimer: Selerix does not provide legal, regulatory or tax guidance, or advice. If legal advice counsel or representation is needed, the services of a legal professional should be sought. The information in this post is intended to provide a general overview of the topics and services contained herein. Selerix makes no representation or warranty as to the accuracy or completeness of the post and undertakes no obligation to update or revise the post based upon new information or future changes.
