Preparing for the Upcoming PCORI Filing Fee

Here’s how HR can stay ready for patient-centered outcome research institute deadlines

The PCORI fee filing deadline is coming up fast—July 31st to be exact. If your organization sponsors a self-insured health plan, this is one of those compliance tasks you don’t want to miss. Let’s break it down so you’re ready to go.

What’s the PCORI fee?

The ACA imposes a fee on employers who sponsor self-insured including level-funded health plans and specified health insurance policies to help fund the Patient-Centered Outcomes Research Institute (PCORI fee).  The Further Consolidated Appropriations Act, 2020, signed into law on Dec. 20, 2019, extended the Patient-Centered Outcomes Research Trust Fund fee imposed by Internal Revenue Code sections 4375 and 4376 for 10 years going forward. As a result of this extension, the PCORI fee will continue to be imposed through 2029.

Key PCORI details for HR: mark your calendars! 

The requirements for this year’s filing have changed for policy and plan years ending after October 1, 2024 and before October 1, 2025, the applicable dollar amount is $3.47 per covered life. PCORI Fees are generally not payable from single sponsor plan assets, since they are imposed on the plan sponsor and not the group health plan.

PCORI Deadline: July 31, 2025

What you can do to prepare to file your PCORI fee

Now is a great time to work with your accounting department, as the PCORI fee is included on Form 720 with other excise taxes.

Coordinate with Your Accounting Department

Your first step should be to collaborate with the accounting department. Determine if they file Form 720, which is required for the PCORI fee. Here’s how to plan:

• If the Accounting Department Files Form 720:
  Confirm when they will need the count of covered lives to file the form on time.  
• If the Accounting Department Does Not File Form 720:
  Coordinate to obtain electronic filing credentials and payment information.

Counting Methods for Sponsors of Applicable Self-Insured Plans

You’ll need to calculate the average number of covered lives under your plan. There are a few ways to do this—pick the one that works best for your setup: 

• Form 5500 Method: Determine the average number of lives covered under the plan for the plan year based on a formula that includes the number of participants actually reported on the Form 5500 for the plan year. This method may only be used if Form 5500 is filed no later than the due date for the fee imposed for that plan year.

• Actual Count Method: Count the covered lives on each day of the plan year and average the result.

• Snapshot Count Method: Determines the average number of lives covered under the plan for the plan year by looking at the totals of lives covered on selected dates during each quarter.

Review certain counting rules that exist for FSAs and HRAs, click here. To determine if the FSA or HRA is subject to the PCORI fee, please review the IRS Application of the PCORI FEE Chart.

Pro Tip: Start early! Don’t wait until the last minute to gather your data or coordinate with accounting. A little prep now saves a lot of stress later.

Preparation is key 

Preparation is key to ensuring the PCORI fee is filed correctly and on time. Coordinate with your accounting department well in advance of the due date and choose the appropriate counting method for your organization.

If you’re finding compliance too complicated to tackle alone, consider leveraging solutions like ComplianceDashboard to simplify the process. Stay ahead of the changes and make compliance work for you—not against you.

Stay compliant. Stay informed.