PCORI 2025: What Every HR Manager Should Know

The Patient-Centered Outcomes Research Institute (PCORI) fee is an annual charge created under the Affordable Care Act (ACA). It helps fund research that supports informed healthcare decisions. The fee must be reported and paid to the IRS each year using Form 720.

Let’s break down what HR needs to handle for smooth and compliant PCORI fee filing:

1. Identifying Applicable Health Plans

HR teams must determine whether their organization’s health plans are subject to the PCORI fee. This often includes:

• Self-insured health plans

• Health Reimbursement Arrangements (HRAs)

• Retiree-only plans

There are some exceptions—for example, certain benefits and plans covering mainly non-U.S. residents may not be subject to the PCORI fee. Identifying these correctly is the first step to proper compliance.

2. Calculating the Fee Accurately

The IRS allows several methods for calculating the average number of covered lives under a plan:

• Actual Count Method

• Snapshot Method

• Form 5500 Method

Choosing the right method and applying it correctly is critical. Mistakes in calculation can lead to penalties or underpayment. HR should also stay updated on any annual fee adjustments, which change based on plan years.

Refer our blog on PCORI Fee Calculation for a comprehensive understanding. 

3. Filing Form 720 and Making the Payment

HR is responsible for ensuring Form 720 is filled out accurately and submitted to the IRS by July 31, 2025.

• This form includes a section for reporting the PCORI fee.

• Payment can be submitted either electronically or by mail.

Even though Form 720 is a quarterly return, the PCORI fee is only reported and paid once a year—by the end of July.

4. Maintaining Proper Records

Keeping detailed records is essential. HR should retain:

• The method used for calculating covered lives

• The actual calculations

• Copies of Form 720

• Proof of payment

These documents are crucial in case of future audits or internal reviews.

5. Staying Informed and Coordinating Internally

PCORI guidelines may change year-to-year, so it’s important that HR:

• Keeps up with IRS updates and publications

• Coordinates with departments like accounting to ensure proper reporting and payment

• Communicates changes or requirements to leadership and benefits teams

Being proactive avoids last-minute rushes and helps maintain smooth compliance.

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For more detailed guidance and updates on the PCORI fee and its application, HR professionals can watch the IRS’s official PCORI Fee Page.

Final Thoughts

Understanding and managing the PCORI fee might feel complex at first, but with the Simple720 PCORI Submission Portal, HR professionals can handle it smoothly. By identifying applicable plans, calculating fees correctly, filing on time, and keeping proper documentation, HR plays a vital role in ACA compliance.

File your PCORI Fee Online with Simple720 today!