The PCORI Fee is a tax that applies pursuant to the Patient Protection and Affordable Care Act (PPACA), more specifically IRC Section 4375 and 4376. The PPACA was enacted into law on March 23, 2010. For plan years beginning after October 1, 2012, the tax became effective. It was originally planned to terminate in 2019, but the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94), enacted December 20, 2019, provided for the extension of the tax for another ten years. This means that the PCORI Fee will be collected until 2029.
The fee is intended for the Patient-Centered Outcomes Research Institute (PCORI). The institute is responsible for funding research focused on comparing the clinical effectiveness of different healthcare interventions to improve patient outcomes.
The PCORI Fee is filed annually through PCORI Submission Online Portal or through Form 720(manually).
The due date for filing and paying the PCORI fee is July 31st of the year following the end of the plan year.
For example:
For the year 2025, the PCORI fee is to be paid before July 31, 2026. The PCORI fee for the period from January to September 2025 for each covered life would be at a rate of $3.47, while that of October to December 2025 would be at a rate of $3.84.
If the Form 720 is not filed on or before the due date or even when payment is not made on or before the due date, then there will be some penalties that the organization may incur which is the PCORI Penalty.
The PCORI fee is charged on an organization that offers a self-insured health plan. It covers:
Failure to report and pay the PCORI fee results in a penalty for these organizations.
For any tax category under Form 720, the penalties are the same. The PCORI fee falls under Part II, IRS Number 133 of Form 720. The penalties for failure to file or failure to pay the PCORI fee are as follows:
Failure to File Penalty - If the Form 720 is not filed on time, a 5% penalty of the unpaid fee is imposed for each month (or part of a month) the return is late. The penalty can increase to a maximum of 25% of the fee owed.
Failure to Pay Penalty - In case the fee is not paid within its due date, there is a penalty of 0.5 percent charged per month (or part thereof) in which the fee is outstanding. The penalty becomes 1 percent after receiving notice of 10 days.
1. Penalties (Failure to File & Failure to Pay)
PCORI Penalty Overview Table
| Type of Non-Compliance | IRS Provision | Impact | Rate (General IRS Rule) |
|---|---|---|---|
| Failure to File Form 720 | IRC §6651(a)(1) | Monthly penalty for late submission | Up to 5% per month (max 25%) |
| Failure to Pay PCORI Fee | IRC §6651(a)(2) | Late payment penalty | 0.5% per month (approx.) |
| Interest on Unpaid Tax | IRC §6601 | Daily interest accrual | IRS federal interest rate (varies quarterly) |
Note - It is important to remember that the actual penalty amount will be determined by the IRS during the audit.
2. Audits and Compliance Risks
Failure to file PCORI on time increases the possibility of scrutiny by the IRS using Form 720 excise tax audit program.
3. Loss of Compliance Reputation
Non-compliance may affect your filing record with IRS systems:
4. Offer Eligibility in the Future and Compliance Advantages
While the IRS has no restrictions on offer eligibility, continued noncompliance can lead to:
To avoid penalties for the PCORI Fee, follow these guidelines:
1. Prepare in Advance - Start preparing for the process well in advance to ensure that you have sufficient time to gather all necessary data.
2. Online Filing Is The Best Option - Online filing is the most convenient mode of filing among the two methods(Manual and Online). It will make things simple for you, and your filling process will be accurate. The IRS requires all businesses to file PCORI Fees Online.
3. Be Financially Ready - Ensure that the required amount for paying the fee has been made available by the due date, which is July 31 of the same year.
4. Make Use of the Authorized Portal - Use the appropriate online portal approved by the IRS for avoiding any kind of complications.
If the PCORI filing deadline is missed:
QuickFile720 is the IRS-Authorized 720 online portal that makes PCORI Fee filing simple for you. Let's see how we streamline the process for you:
Most Cost-effective - With QuickFile720, get the best cost-effective filing solutions in the United States.
Bulk Filings - In case of a company with multiple plans, we have the possibility of bulk filing for the reporting of PCORI fees via our portal. Through this facility, you will be able to file several PCORI Fees at one time making your task easy. We will file your PCORI fees on your plans in an efficient way so that all your plans are reported to the IRS.
Instant IRS Acknowledgement - You will immediately get IRS acknowledgment as soon as IRS approves.
In 2026, Let QuickFile720 streamline your PCORI Fee filing process, ensuring compliance, saving you time, and avoiding penalties.