The IRS recently issued Notice 2025-61 to increase the Patient-Centered Outcomes Research Institute (PCORI) fee amount for plan years ending on or after Oct. 1, 2025, and before Oct. 1, 2026. The updated PCORI fee amount is $3.84 multiplied by the average number of lives covered under the plan. For plan years that ended on or after Oct. 1, 2024, and before Oct. 1, 2025, the PCORI fee amount is $3.47 multiplied by the average number of lives covered under the plan.
The PCORI fee is imposed on health insurance issuers and self-insured plan sponsors to fund comparative effectiveness research. It applies through the plan or policy year ending before Oct. 1, 2029.
PCORI fees are reported and paid annually on IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due each year by July 31 of the year following the last day of the plan year. For plan years ending in 2025, the PCORI fee is due by July 31, 2026. Employers with self-insured health plans should have reported and paid PCORI fees for 2024 by July 31, 2025.
The PCORI fees are calculated based on the average number of covered lives under the plan or policy. This generally includes employees and their enrolled spouses and dependents unless the plan is a health reimbursement arrangement (HRA) or health flexible spending account (FSA). Final rules outline a number of alternatives for issuers and plan sponsors to determine the average number of covered lives.
More information on PCORI fees is available from the IRS, including an overview, common questions and answers and a chart summarizing the fees’ application to common types of health coverage.
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