Blog Details

Article Summary

• The 2026 PCORI fee applies to most HRAs because the IRS treats them as self-insured health plans.

• For plan years ending October 2025 through September 2026, the fee is $3.84 per covered life.

• Employers must report and pay the fee using Form 720 by July 31, 2026.

• The applicable rate is determined by the plan year end date, not the filing date.

• HRAs integrated with self-insured health plans may qualify for special counting rules that help avoid duplicate fees.

• Employers can use the Actual Count, Snapshot, or Form 5500 Method to determine covered lives.

• ICHRAs and QSEHRAs are generally subject to the PCORI fee and must be reported accordingly.

• Common mistakes include using the wrong rate, miscounting covered lives, and missing the filing deadline.

• Late filing or payment may result in IRS penalties and interest charges.

• Reviewing your covered-life count early can help ensure accurate and timely compliance.

The PCORI fee is a small annual charge that funds patient-centered medical research. It applies to most Health Reimbursement Arrangements (HRAs) because the IRS treats them as self-insured health plans. For plan years ending October 2025 through September 2026, the rate is $3.84 per covered life. You report it on Form 720 by July 31, 2026. 

Sponsor an HRA and the job is yours. You count covered lives, apply the right rate, and file on time. This guide covers who pays, how to calculate the fee, the three IRS counting methods, and the errors that cost employers money.

Yes. An HRA reimburses employees for medical costs using employer money. That makes it a self-insured health plan under IRS rules, and that triggers the fee.

The employer pays and files Form 720, not the employees or the carrier. This covers standalone HRAs, integrated HRAs, and most account-based plans.

The IRS sets the rate and bumps it each year for inflation. What you owe depends on when your plan year ends, not when you file.

1)Current IRS-Approved Fee Rates

Your fee depends on the last day of the plan year. Use the rate tied to that end date, not the date you submit Form 720.

2)PCORI Fee Rate Comparison

3)Which Rate Applies to Your Plan?

A plan year ending June 30, 2025 uses the $3.47 rate. One ending December 31, 2025 uses $3.84. The end date decides the fee, never the filing date. This trips up a lot of people, so confirm your plan year close before you run any numbers.

Who pays the PCORI fee depends on how the Health Reimbursement Arrangement (HRA) is set up and whether it sits alongside another health plan. The structure decides who's responsible and what filing looks like.

1)Standalone HRA

If the HRA is the only coverage offered, the employer pays the PCORI fee. The math is simple:

• Count covered employees enrolled in the HRA

• Apply that count to the fee owed

• File and pay by the deadline

One detail makes it easier: spouses and dependents aren't counted separately. Each participating employee counts as a single covered life.

2)HRA Combined With a Self-Insured Health Plan

It works differently when an HRA is integrated with a self-insured plan from the same employer, both sharing the same plan year.

Here you usually count covered lives once. The rules block duplicate fees for the same people, which plan sponsors appreciate. In most cases you can:

• Count covered lives in a single calculation

• Report one PCORI fee payment

• Skip separate fees for the HRA and the medical plan

Plan design still matters. Confirm the HRA and health plan qualify for integrated treatment before you file.

3)HRA Combined With a Fully Insured Health Plan

Pair an HRA with a fully insured group plan and responsibility splits.

The carrier pays the PCORI fee for the fully insured medical plan. The employer still owes a separate fee for the HRA. So:

• The insurer handles the fee for the insured coverage

• The employer calculates and pays the fee for the HRA

• Separate reporting obligations apply

This one gets missed more than you'd expect. A quick yearly review of your HRA setup keeps the right party filing Form 720 and paying on time.

The math is simple. Covered lives times the applicable rate.

Covered lives × applicable rate = PCORI fee due

Take an HRA with 80 participants for a plan year ending December 31, 2025:

80 × $3.84 = $307.20

That figure goes on Form 720. Skip the manual math if you want. A PCORI fee calculator handles the count and the rate for you.

The IRS gives you three approved methods to count covered lives. Pick the one that fits your records, then apply it consistently.

1)Actual Count Method

Add up covered lives for every day of the plan year, then divide by the number of days. It runs on real enrollment data and suits employers who keep detailed records.

2)Snapshot Method

Count covered lives on set dates during the year, then average them. This is the practical pick when daily tracking isn't realistic.

3)Form 5500 Method

This one pulls participant counts you already reported on Form 5500. It's only open to employers who meet specific IRS eligibility rules, so check those first.

Individual Coverage HRAs (ICHRAs) owe the PCORI fee. The employer counts covered employees and pays like any self-insured plan.

QSEHRAs (Qualified Small Employer HRAs) owe it too. Small employers often assume their size exempts them. It doesn't. The usual slip-up is skipping the filing, which invites penalties later.

Miss July 31 and you face penalties, interest, or both. Moving fast limits the damage.

1)Failure-to-File Penalties

Skip the Form 720 deadline and the IRS can penalize you based on how late the return is and how much you owe. Penalties spike if the IRS decides the delay was deliberate.

2)Failure-to-Pay Penalties

Report the fee but underpay, and the IRS can add a failure-to-pay penalty plus interest. Interest keeps building until you clear the balance. This PCORI penalty guide breaks down how the charges stack up.

A handful of errors keep showing up. Spot them early and you avoid corrections later.

1)Counting Dependents Incorrectly

Some plans count only employees and wrongly drop covered spouses and children. Others want every life covered. The rule depends on your HRA structure, so confirm it against the IRS PCORI guidance before counting.

2)Applying the Wrong Rate

The rate moves every year. Grab the wrong plan year's rate and you'll over or underpay, then scramble to fix it after filing. Check the current figure on the IRS rates page.

3)Missing Integrated Plan Rules

Run both a self-insured medical plan and an HRA, and it's easy to pay twice for the same people. Integrated-plan rules let you count those lives once, so check before you double-pay.

4)Filing Late or Using the Wrong Reporting Period

Plenty of employers grab the calendar year instead of the plan year when setting the rate and deadline. That mismatch breeds wrong math and late filings.

The PCORI fee for HRAs gets easy once three things are right. The current rate ($3.84 per covered life for plan years ending October 2025 through September 2026). The July 31, 2026 deadline. And an accurate covered-life count using one of the three IRS methods.

Check your covered-life numbers early so the deadline doesn't catch you scrambling. File your PCORI fee online quickly and accurately with QuickFile720.

Frequently Asked Questions

1)Who pays the PCORI fee for an HRA?

The employer who sponsors the HRA, since the IRS counts it as a self-insured plan. You report the fee on Form 720, and you can walk the full process in this online filing guide.

2)Do dependents count when calculating an HRA PCORI fee?

It depends on the arrangement. Standalone HRAs usually count covered employees only, while other structures want every covered life.

3)Are ICHRAs and QSEHRAs subject to the PCORI fee?

Yes, both are. The employer pays based on covered employees, and small employers get no exemption. The PCORI fee guide explains how each is treated.