The Patient-Centered Outcomes Research Institute (PCORI) fee helps fund research that evaluates and compares health outcomes, clinical effectiveness, and risks and benefits of medical treatments and services. The fee, effective 2012–2029, is treated like an excise tax by the Internal Revenue Service (IRS) with the final payment due in July 2030. The PCORI fee is assessed on all covered lives — including employees, retirees, spouses and dependents. The PCORI fee is due July 31, 2025.
PCORI Overview
For fully insured plans, health insurance carriers directly cover the PCORI fee, relieving employers with solely fully insured group health plans from any obligations. However, Employers overseeing self/level funded medical plans or applicable Health Reimbursement Arrangements (HRAs) concluding in 2024 must use Form 720 to fulfill their reporting obligations and pay PCORI fees by July 31, 2025.
Adjusted PCORI Fee
The payment amounts due in 2025 vary based on the employer’s plan year, specifically the plan year’s end date. The PCORI fee is increasing from $3.22 to $3.47 per covered life for plan years ending in October 2024 through September 2025.
The IRS maintains a website dedicated to PCORI and has a table that identifies the types of coverage subject to the PCORI fee.
Calculating the PCORI Fee
To calculate the PCORI fee, employers need to determine the average number of lives covered under a self-insured health plan using one of the IRS-approved methods for counting covered lives such as the actual count or snapshot method, and apply the relevant PCORI fee rate. Carriers should be able to provide the actual count of covered lives needed to file.