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The Patient-Centered Outcomes Research Institute (PCORI) fee is a charge mandated under the Affordable Care Act (ACA) to fund significant research for improving health outcomes. The fee is an annual one laid on insurers and self-insured health plan sponsors, reported on IRS Form 720. The PCORI fee runs through 2029, so companies must constantly update themselves on the rate changes to comply in a timely manner. The 2025 update includes new rates and the deadline, which are now ones organizations must prepare for.

With respect to plan years ending on or after October 1, 2024, and before October 1, 2025, the IRS has increased the PCORI fee on a per-covered life basis. While the exact number may vary from year to year due to inflation in the medical field, a lot of health plan administrators and benefits consultants make it a point to keep abreast of changes in these rates. Late or incorrect payments could incur penalties from the IRS. Companies are to have reasonable assurance of their plan year and an accurate calculation of the fee before filing their Form 720 on or before July 31, 2025.

Employers offering self-insured health plans, insurers, and some HRAs (Health Reimbursement Arrangements) are subject to the PCORI fees. Your organization may be exempt from complete ACA reporting while still being subject to this annual federal excise tax. It is vital to know whether your company is subject to—and how to compute the average number of lives entitled to—provide for the timely filing of your IRS obligations.

Filing the PCORI fee using IRS Form 720 is a manageable process, provided that they get on top of this early. Employers will need to select the correct plan year, apply the correct method of life-counting covered (snapshot, actual count, or Form 5500), and make the payment by the IRS July 31st deadline. Fastest processing, high precision, and instant IRS confirmation have led many companies to use an e-filing platform. These features are specifically valuable to benefits managers and compliance teams trying to make their ACA-related tax reporting less tedious.

As the 2025 PCORI deadline nears, organizations should consider health plans, upgrade internal tracking, and contract with payroll or compliance vendors. If you fail to comply, it can cost you compliance gaps and monetary penalties. To ensure your company is compliant and ready for audits, remain in the know regarding any ACA-related fees pertinent to your business, whether you are administering a fully insured or self-insured group health plan. Organizations are advised to begin preparations well in advance of the July 31st deadline.