The Patient-Centered Outcomes Research Institute (PCORI) was established by the Affordable Care Act (ACA) to fund research that helps patients, providers, and policymakers make better-informed health care decisions.
To support this work, the ACA created a temporary annual fee – commonly known as the PCORI Fee – that applies to most health insurance policies and self-funded group health plans.
Purpose of the Fee
- The fee funds comparative clinical effectiveness research, designed to improve evidence-based medical decision-making.
- PCORI conducts and disseminates research on health outcomes, quality, and cost-effectiveness to support more informed treatment choices.
Who Pays the Fee
- Fully Insured Plans
- The insurer is responsible for paying the PCORI Fee.
- Employers with fully insured plans generally do not have to take action or file forms.
- Self-Funded and Level-Funded Plans
- The plan sponsor (usually the employer) is responsible for calculating, reporting, and paying the fee directly to the IRS.
- Employers typically work with their TPA, ASO vendor, or level-funded partner to gather covered lives data and complete filings.
Applicable Plans
The PCORI Fee applies to:
- Major medical plans
- Self-funded health plans (including level-funded arrangements)
It does not apply to:
- Excepted benefits (e.g., stand-alone dental or vision plans)
- Health savings accounts (HSAs)
Fee Amount and Due Date
- The fee is based on the average number of covered lives during the plan year, multiplied by a dollar amount set annually by the IRS and adjusted for inflation.
- The payment is due by July 31 of the year following the end of the plan year.
- For example: For a calendar year 2024 plan, the fee is due by July 31, 2025.
| Plan Year Ending Between | Applicable Dollar Amount |
|---|---|
| Oct. 1, 2024 – Sept. 30, 2025 | $3.47 per covered life |
| Oct. 1, 2023 – Sept. 30, 2024 | $3.22 per covered life |
How to Pay
- Employers with self-funded and level-funded plans report and pay the fee using IRS Form 720 (Quarterly Federal Excise Tax Return).
- Even though Form 720 is filed quarterly, the PCORI Fee is only due once per year.
Duration of the Fee
- Originally, the PCORI Fee applied to plan years ending after September 30, 2012 and before October 1, 2019.
- Congress extended the fee through plan years ending before October 1, 2029, so the fee remains in effect for now.
Fee Growth Over Time
When the PCORI Fee began in 2012, the amount was $1.00 per covered life. Over time, it has steadily increased with inflation:
- Early years (2012–2014): $1.00 → $2.00
- Mid period (2015–2020): $2.08 → $2.54
- Recent years (2021–2025): $2.66 → $3.47
This annual increase demonstrates the importance of using the most current IRS rate each year when calculating the fee.