Is the PCORI Fee Going Away? Everything You Need to Know
The Patient-Centered Outcomes Research Institute (PCORI) Fee remains an important compliance requirement for many employers, health insurers, and plan sponsors filing IRS Form 720. Because the fee was originally expected to expire years ago, many businesses still wonder whether the PCORI Fee is ending or if it remains active today.
If your organization sponsors a self-insured health plan or handles excise tax reporting obligations, understanding the current status of the PCORI Fee is essential.
This guide explains whether the PCORI Fee is going away, how long it applies, who must file, possible penalties, and how to report it correctly using Form 720.
Is the PCORI Fee Still Active?
Yes. The PCORI Fee is still active and continues to apply under Internal Revenue Code Sections 4375 and 4376.
Although many taxpayers expected the fee to expire several years ago, Congress later extended the applicability period through policy and plan years ending before October 1, 2029.
This means organizations may continue to have filing obligations through 2030 depending on their plan year ending date.
Example:
If a self-insured health plan ends on December 31, 2028, the PCORI Fee must generally be reported and paid by July 31, 2029.
If a plan year ends on September 30, 2029, the filing due date would generally fall on July 31, 2030.
The PCORI Fee was established under the Affordable Care Act (ACA) through the Health Care and Education Reconciliation Act of 2010 to help fund the Patient-Centered Outcomes Research Institute (PCORI) and related comparative clinical effectiveness research.
PCORI Fee Timeline: When It Started and How Long It Applies
The PCORI Fee first became applicable for policy and plan years ending after September 30, 2012.
Under the original law, the fee was scheduled to expire for policy and plan years ending before October 1, 2019. Because of this original expiration period, many employers and plan sponsors assumed the filing requirement had permanently ended.
However, the Further Consolidated Appropriations Act 2020 extended the applicability period for an additional 10 years. As a result, the PCORI Fee now applies to policy and plan years ending before October 1, 2029.
PCORI Fee Timeline Overview
Organizations sponsoring applicable health coverage must continue complying with annual Form 720 filing requirements until the extended expiration period ends.
What Happens If You Miss Filing the PCORI Fee?
Failure to file or pay the PCORI Fee may result in PCORI Penalties and interest because the fee is reported through Form 720.
Late filing or late payment may result in penalties and interest under applicable IRS provisions, including IRC Section 6651.
Generally:
The failure-to-file penalty may be 5% of the unpaid tax per month, up to a maximum of 25%.
Interest may continue accumulating until the outstanding balance is fully paid.
Incorrect or incomplete filings may also lead to IRS notices, delays, or additional compliance reviews.
Organizations required to electronically file PCORI Fee should ensure all information is accurate and submitted before the deadline to avoid processing issues and potential penalties.
How Is the PCORI Fee Filed?
The PCORI Fee is reported on IRS Form 720 under Part II - IRS No. 133 – Patient-Centered Outcomes Research Fee.
Although Form 720 is a quarterly federal excise tax return, the PCORI Fee is generally reported only once each year, with the filing typically due on July 31.
Two methods to report PCORI Fee
Manual Filing Method
Businesses may manually file by downloading the latest version of IRS Form 720, completing the PCORI Fee section under Part II, and mailing the form with payment to the appropriate PCORI mailing address. This method requires manual calculations and careful preparation of filing details.
Online Filing Method
Alternatively, Organizations can use the IRS-Authorized e-filing portal such as Simple720. The electronic procedure makes things easier and minimizes the likelihood of mistakes.
The IRS requires filers to choose the online method for their PCORI Fee submission.
Current PCORI Fee Rates
The applicable PCORI Fee rate depends on the plan or policy year ending date.
For recent filing periods:
$3.47 per covered life generally applies for plan years ending between October 1, 2024 and September 30, 2025.
$3.84 per covered life generally applies for plan years ending between October 1, 2025 and September 30, 2026.
The IRS adjusts these fee amounts annually for inflation.
Our PCORI pre-filing window is now open, allowing you to complete your PCORI Fee reporting in advance with a faster and smoother filing experience.
Conclusion
The PCORI Fee has not expired yet and continues to be relevant for many employers, insurers, and self-insured health care plans. Despite the initial expectation that the PCORI Fee will expire in 2019, legislation has been passed, extending its applicability date up until the end of October 1, 2029.
This means that the organization could still be filing the fee up until 2030 based on the end date of the plan year. Therefore, accurate filing of the PCORI Fee using the Form 720 before the July 31 deadline each year is crucial.
File your PCORI Fee online with Simple720 now!
