Who Pays the PCORI Fee? A Complete Guide(2026)
Article Summary
Whether the employer or insurer pays comes down to plan structure: insurers handle it for fully insured plans, and employers pay directly for self-insured plans, covering active employees, retirees, and COBRA participants. Tax-exempt and government employers owe it too, unless their coverage qualifies as an exempt governmental program.
Multiple policies or plans generally each owe a separate fee. The one exception: two self-insured plans can combine into a single fee, but only if they share the same sponsor and same plan year.
Most major medical coverage triggers the fee (fully insured, self-insured, retiree-only, COBRA, government plans), along with non-excepted HRAs and FSAs. Stand-alone dental/vision, Medicare, Medicaid, CHIP, HSAs, and workers' comp are excluded.
A fully insured medical plan paired with a separate HRA means two fees, not one: the insurer covers the medical plan, the employer still owes separately for the HRA.
When an HRA is integrated with a self-insured medical plan under the same sponsor and plan year, the two count as one plan and only one fee applies.
Newer reimbursement arrangements, like self-funded fertility benefit programs, get treated like HRAs for PCORI purposes, catching employers who assume the fee only applies to traditional medical coverage.
Short plan years (under 12 months) still owe the fee, prorated based on average lives covered during that shorter stretch.
The fee equals average covered lives times the applicable rate ($3.47 for plan years ending January 1 through September 30, 2025; $3.84 for October 1 through December 31, 2025), reported on Form 720 under IRS No. 133.
For plan years ending in 2025, the deadline is July 31, 2026. If PCORI is an employer's only Form 720 liability, they file once a year instead of quarterly, and no deposits are required.
Who Is Responsible for Paying the PCORI Fee?
Responsibility comes down to one distinction: is the plan insured or self-insured?
Fully Insured Plans
The insurance company calculates, reports, and pays the fee. As an employer, you don't file anything for that coverage. The carrier handles it as part of managing the policy.
Self-Insured Plans
Here, the employer is the plan sponsor, and the plan sponsor pays directly. This holds true for active employees, retirees, and people on COBRA. If your company funds the claims instead of buying a policy, you're the one filing Form720
Multiple Policies or Plans
When coverage runs under more than one policy or arrangement, each issuer or sponsor generally owes a separate fee for its own covered lives. There's one exception: two or more self-insured plans can be treated as one plan, but only if they share the same sponsor and the same plan year. Miss either condition, and you're filing separately for each.
Tax-Exempt and Government Employers
Nonprofit status doesn't exempt you. State and local government employers, along with tax-exempt organizations, owe the fee the same way private employers do, unless the coverage qualifies as an exempt governmental program.
Health Plans Subject to the PCORI Fee and Exemptions
Not every type of coverage triggers the fee. Here's where things typically land.
The above table is aligned with the below 2 IRS source links
Plans and Arrangements Excluded from the Fee
Stand-alone dental and vision coverage don't count. Neither do Medicare, Medicaid, or CHIP.
HSAs and Archer MSAs are excluded too, since they're individual accounts rather than group health plans. Stop-loss coverage, hospital indemnity benefits, disability income policies, workers' compensation, and on-site clinics fall outside the fee's reach as well.
Employee assistance, disease management, and wellness programs are exempt, as long as they don't provide significant medical care on their own. Coverage built specifically for employees who work and live outside the U.S. is exempt too, since the fee only applies to plans covering U.S. residents.
Situations That Often Cause Confusion About Who Pays
A few scenarios trip up even experienced benefits administrators.
Fully Insured Plan Paired with an HRA
The insurer pays the fee for the medical plan. The employer still owes a separate fee for the HRA. People often assume one fee covers both. It doesn't.
HRA Integrated with a Self-Insured Plan
This one's actually simpler. If the HRA and the self-insured medical plan share the same sponsor and the same plan year, they're treated as a single plan. Only one fee applies.
Short Plan Years
A newly established plan, or one switching to a calendar year, may run fewer than 12 months. The fee still applies, calculated on the average lives covered during that shorter stretch.
Standalone HRAs and FSAs
Employers can assume one covered life per employee enrolled in an HRA, and one per employee enrolled in an FSA. That's simpler than major medical, where every dependent counts.
Newer Reimbursement-Style Arrangements
Self-funded fertility benefit programs and similar direct-to-consumer arrangements are treated like HRAs for PCORI purposes. This catches employers who assume the fee only applies to traditional medical plans.
Quick Reference: Common Edge Cases
How is the PCORI Fee Calculated and Reported?
The fee equals the average number of lives covered during the plan or policy year, multiplied by the applicable rate.
Insured policy issuers choose from four methods: actual count, snapshot, member months, or state form.
Self-insured plan sponsors choose from three: actual count, snapshot, or Form 5500.
Per the IRS rates chart, the applicable rate depends on when the year ended: $3.47 per life for years ending January 1 through September 30, 2025, and $3.84 for years ending October 1 through December 31, 2025.
The fee is reported under IRS No. 133 in Part II of Form 720.
PCORI Filing Deadline and Compliance Requirements
The fee is reported on Form 720, filed for the second quarter regardless of when coverage actually ended. For plan or policy years ending in 2025, the deadline is July 31, 2026.
If PCORI is your only liability, you file once a year rather than quarterly. Deposits aren't required. Missing the deadline triggers penalties and interest, so the date matters as much as the math.
Conclusion
Who pays the PCORI fee always traces back to plan structure: insurers for fully insured coverage, employers for everything self-insured, including HRAs, FSAs, and COBRA. The edge cases, not the basic rule, are where most sponsors get tripped up and where a missed fee usually starts.
If you're still sorting out which plans on your roster owe the fee this year, QuickFile720 can help you calculate, file, and pay it correctly before July 31.
e-File PCORI Fee using QuickFile720 today!