PCORI Filing Fees

Hi everyone, we wanted to push out one more blog that discusses specifically the PCORI filing fees that apply to ALL employers that have either level-funded or self-funded must pay.  

What is this? 

 At the end of the day, it’s another tax on employers that is used to pay for the Patient-Centered Outcomes Research Institute (PCORI), a nonprofit organization that was set up by the Affordable Care Act (ACA) when it passed back in 2010.  One could easily argue this is another example of this legislation making care LESS affordable since this is an example of a tax specifically on employers, but that’s another conversation for another day. The ACA has been with us long enough now, so pretty sure it’s not going anywhere.   

First, let’s take a specific look at the Patient-Centered Outcomes Research Institute (PCORI) before diving into the fees and the reporting requirements.  This is another one of those things that sounds great on paper, but it would just be nice if this were something that employers weren’t paying for directly.  One could also argue, is this organization really needed?  

The Patient-Centered Outcomes Research Institute (PCORI) is a U.S.-based non-profit organization established by the Patient Protection and Affordable Care Act (ACA) in 2010. Its primary mission is to fund research that provides patients, caregivers, and healthcare providers with evidence-based information to make informed health decisions.

Key Points About PCORI

• Focus on Patients: PCORI emphasizes patient-centered comparative clinical effectiveness research (CER). This type of research compares the benefits and potential harms of different healthcare options.

• Engagement: PCORI actively involves patients, caregivers, and other stakeholders in all aspects of its funded research, ensuring that the studies are relevant and useful.

• Funding: PCORI funds research that addresses questions important to patients and healthcare decision-makers, generating meaningful evidence for better-informed health decisions.

• Dissemination: PCORI makes the results of its funded studies easily accessible and usable by those who need them to make better-informed decisions about health and healthcare.

PCORI’s approach to healthcare research is intended to improve the quality and relevance of evidence available to help people make informed choices about their healthcare options. You can learn about the organization at PCORI.org.

Now that we’ve discussed the PCORI organization itself, let’s dive into the meet and potatoes and talk about what everyone is most interested in. The filing rules and the fees for this year.  

What is PCORI Filing?

• Purpose: The PCORI fee funds research that compares the effectiveness of medical treatments to improve patient care.

• Who Pays: The fee is imposed on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans.

• Duration: The fee applies to policy or plan years ending on or after October 1, 2012, and before October 1, 2029 

Key Points for 2025 PCORI Filing

• Form Used: The PCORI fee is reported using Form 720, Quarterly Federal Excise Tax Return 

• Filing Frequency: Although Form 720 is a quarterly return, the PCORI fee is filed annually, with the due date being July 31.

• Calculation: The fee is based on the average number of lives (total lives, not employees – this count includes employees & dependents) covered under the policy or plan. There are several methods to determine this average:

  • Actual Count Method

  • Snapshot Method

  • Member Months Method

  • State Form Method 

Specific Instructions for 2025

• Manual Filing:

  1. Download the latest version of Form 720 from the IRS website.

  2. Complete the required details for the PCORI fee.

  3. Mail the completed form along with a payment check to the designated PCORI mailing address.

• Online Filing:

  1. Use any IRS-approved online portal to file Form 720.

  2. This method allows you to complete your PCORI filing in just a few minutes.

• Important Dates:

• Filing Deadline: July 31, 2025 

• Applicable Rates: The fee rate varies depending on the policy or plan year. Here’s a quick breakdown:

  • PCORI Fees for Plans Ending in 2024

    • For plan years ending between January 1, 2024, and September 30, 2024: The fee is $3.22 per covered life

    • For plan years ending between October 1, 2024, and December 31, 2024: The fee is $3.47 per covered life

  • PCORI Fees for Plans Ending in 2025

    • For plan years ending between January 1, 2025, and September 30, 2025: The fee is $3.47 per covered life 

By following these instructions, you can ensure that your PCORI filing is accurate and timely.  If anyone has any questions or needs further assistance, the IRS website provides a pretty comprehensive site that can be found here –   https://www.irs.gov/newsroom/patient-centered-outcomes-research-institute-fee 

HBC’s 2 cents: This filing is annoying and a pain in the rear, but another government-imposed tax on health plans to cover more government bureaucracy, and it actually created an entire new non-profit that is completely funded by these fees.  

All good intentions, I am sure (I truly hope, but you never know), but every single mandate, everything that any government agency says has to be covered increases costs to employers and ultimately in many cases to the consumer.   

The PCORI fees/filing requirements were originally supposed to terminate in 2019, but, of course, got extended another 10 years, so now it is set to go away in 2029.  

I am hopeful that it does in fact go away this time.  For many of our clients, this is a double tax as they have to pay the fee AND, in many cases, pay their CPA or accountant as well to handle the IRS paperwork, plus their time dealing with it internally, so you could even call it a triple tax.  ☹

Thank you all for the read!  If you have any questions or would like to dive into this in more detail, please let us know.  We’re happy to help and love strategizing.  

Ryan