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PCORI fee is an ACA-mandated levy that finances activities leading to research outcomes meant to improve health care delivery and outcomes. The fee lays its charge upon health insurance issuers and self-insured plan sponsors. The fee must be reported and paid by self-filing via IRS Form 720. Therefore, ongoing observation of the PCORI fee for any changes is required to remain compliant and accurately complete required submissions concerning health plan obligations.

For the period 2025, the IRS adjusted PCORI fees per covered life basis on the plan year. The fees for the plan years ending between October 1, 2024, and September 30, 2025, are inflation-indexed. Employers are encouraged to confirm what amount applies to their plan's year-end date for correct calculation of PCORI liability. The proposed use of the latest IRS guidance avoids potential issues with underpayment at the time of completing Form 720.

The deadline for filing and paying the PCORI fee remains 31st July of every year, and it should be done with the assistance of IRS Form 720 (Quarterly Federal Excise Tax Return). While the form is quarterly for other taxes, it is usually filled once every year for the PCORI. Late submissions might incur interest and penalty charge, thus timely filing is a critical pillar for the employers and plan administrator's compliance.

Under fully insured health plans-the insurer pays the burden while under self-insured health plans, the burden is lodged by the employer or plan sponsor- the PCORI fee applies. This also includes health reimbursement accounts (HRAs) and any subordinated self-funded benefits thereto. If a self-funded group health plan is in operation, it is the duty of the administrator to ensure that the correct headcount methodology is being employed in the calculation of covered lives and consequently, the amount of fee. 

It is now becoming a trend for businesses to e-file Form 720 through the IRS, which offers a shorter processing time and more accurate filing. Employers are encouraged to stay in the loop with the IRS for any changes with respect to PCORI fees or reporting instructions. Staying up to date with IRS guidance and utilizing compliance software for PCORI or professional services will make the entire process simpler and helps avoid errors. Having well-maintained documentation and correct fee calculation will shield your firm from unprovoked audit for monetary penalties.