PCORI Fees

PCORI Fees are annual charges imposed under the Affordable Care Act on health insurance issuers and sponsors of self-insured health plans to fund the Patient-Centered Outcomes Research Institute. The fee applies to plan or policy years ending between October 1, 2012, and September 30, 2029. The fee amount is based on the average number of covered lives under the plan, including employees, retirees, spouses, dependents, and individuals receiving other continuation coverage.

Plan sponsors of self-insured plans, including Health Reimbursement Arrangements (HRAs), are responsible for paying the fee. Special rules apply for multiple self-insured arrangements under the same sponsor and plan year, which may be subject to a single fee

Key Facts

• Purpose: Funds medical outcomes research via PCORI.
• Who Pays: Insurance issuers for fully insured plans; employers (plan sponsors) for self-insured plans and HRAs.
• Fee Calculation: Determined by the average number of covered lives multiplied by the annual fee amount.
• Annual Amount:
  
  • Plans ending between Oct 1, 2024, and Dec 31, 2024: $3.47 per covered life
  • Plans ending Jan 1–Sept 30, 2024: $3.22 per covered life
• Filing Deadline: Paid via IRS Form 720 by July 31 of the year following the plan year.

1. Who is responsible for paying PCORI fees?

Insurance carriers pay on fully insured plans; employers pay for self-insured plans and HRAs.

2. How is the fee calculated?

Fee = Average covered lives × applicable dollar amount ($3.22 or $3.47, depending on plan end date).

3. When must PCORI fees be paid?

By July 31 following the end of the plan or policy year, via the second quarter IRS Form 720.

4. How do I calculate “average covered lives”?

Use one of IRS-approved methods: actual count, snapshot (with optional factor), or Form 5500 method.

5. Are all health plans subject to PCORI fees?

Most major medical plans are, but excepted benefits like standalone dental/vision and most FSAs/HSAs are exempt.