How to File and Pay PCORI Fees Using Form 720

To file and pay PCORI fees using Form 720, report the fee once a year on Part II of the form under IRS No. 133, calculate it by multiplying your average number of covered lives by the applicable rate, and submit the return with payment by July 31 of the year following your plan year end. For plan years ending between October 2025 and September 2026, the rate is $3.84 per covered life.¹ Only one Form 720 is required per year when PCORI is your only excise tax obligation.

Who Actually Files

The filer depends on how the plan is funded. For fully insured coverage, the insurance carrier calculates and pays the fee, and the cost is built into the premium. Employers with fully insured plans do not file Form 720 for PCORI.²

For self-insured plans, the plan sponsor — usually the employer — files and pays.³ Standalone Health Reimbursement Arrangements and health FSAs that don’t qualify as excepted benefits are treated as self-insured plans for this purpose.⁴ If a self-insured HRA sits alongside a self-insured medical plan under the same sponsor and same plan year, one fee covers both. If the HRA pairs with a fully insured policy, the employer owes a separate fee on the HRA and may count one covered life per participating employee.

Several arrangements sit outside the fee entirely: standalone dental or vision plans, HSAs and Archer MSAs, government programs like Medicare and Medicaid, stop-loss and indemnity reinsurance, most supplemental coverage, workers’ compensation, on-site medical clinics, employee assistance and wellness programs that don’t provide significant medical care, and plans for employees working outside the United States.

Counting Covered Lives

The fee equals your average covered lives during the plan year times the applicable rate. Self-insured plan sponsors pick one of three counting methods and apply it consistently.¹

Actual count: total the covered lives on each day of the plan year and divide by the number of days.
Snapshot: pick one date in the first, second, or third month of each quarter, count covered lives on that date, and divide by the number of dates used.
Form 5500: use the participant counts from your Form 5500 or 5500-SF. For self-only coverage, add the beginning-of-year and end-of-year counts and divide by two. For plans offering family coverage, add the two counts without dividing. The 5500 must be filed before the PCORI deadline for this option to be available.⁵

A self-insured plan with an average of 500 covered lives and a December 2025 plan year end would owe 500 × $3.84 = $1,920.

The Rate That Applies to Your Plan Year

The rate is set by when your plan year ends, not when you file. For returns due July 31, 2026:⁶

Plan years ending January through September 2025: $3.47 per covered life.
Plan years ending October through December 2025: $3.84 per covered life.

Plan years ending October 1, 2025 through September 30, 2026 use the $3.84 rate, with returns due July 31, 2027. The IRS posts updated rates each year on its PCORI filing information page, so confirm the current figure before running your calculation.

Completing and Submitting Form 720

Enter the PCORI fee on Part II of Form 720 under IRS No. 133. Separate lines apply to specified health insurance policies (used by carriers) and applicable self-insured health plans (used by employer plan sponsors).⁷ Multiply your average covered lives by the applicable rate and enter the resulting fee.

When PCORI is your only Form 720 obligation, file once a year for the second quarter. Do not send blank returns for the other three quarters.¹ The return is due July 31 of the year after the plan year ends. A calendar-year plan ending December 31, 2025 has a July 31, 2026 deadline. No estimated deposits are required; the full amount is due with the return.

Paying the Fee

Electronic payment goes through the Electronic Federal Tax Payment System (EFTPS). When paying through EFTPS, apply the payment to the second quarter of the year. Form 720 itself can also be filed electronically through IRS-approved e-file providers.⁸

Filing by mail is still permitted. Send the completed Form 720 with Form 720-V (the payment voucher) and your check or money order to the IRS service center in Ogden, Utah, following the address in the current Form 720 instructions.⁷ Keep a copy of the filed return and proof of payment for at least four years.

Fixing an Error After You File

If you over- or underreported the fee, use Form 720-X to adjust the liability on a previously filed Form 720.⁹ Correcting an underpayment quickly limits the interest that builds on the unpaid balance.

Late Filing and Late Payment

Missing July 31 exposes you to the same penalty structure that applies to other Form 720 excise taxes:¹⁰

Late filing: 5% of the unpaid fee for each month or partial month the return is late, capped at 25%.
Late payment: 0.5% of the unpaid fee for each month or partial month the payment is overdue, rising to 1% per month if the IRS issues a notice of intent to levy and the balance remains unpaid after 10 days.
When both apply in the same month, the combined penalty cannot exceed 25%.

Interest also runs from the due date until the balance is paid. The IRS adjusts the underpayment rate quarterly; for the first quarter of 2026, it is 7% per year, compounded daily.¹¹

When the Fee Ends

The PCORI fee applies to plan years ending on or after October 1, 2012 and before October 1, 2029.¹² The last plan years subject to the fee will be those ending in September 2029, with final payments due by July 31, 2030.

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