Your Go to Guide for PCORI Fee Calculation(2026)
Why the PCORI Fee Exists
Calculating Average Covered Lives for the PCORI Fee
Special Rules for HRAs
If the employer maintains a self-funded medical plan with the same plan year, the HRA and medical plan can be treated as a single entity for PCORI calculation.
If the medical plan is a fully insured plan, the HRA and medical plan are treated separately: the insurer pays for the medical plan, and the employer or plan sponsor pays for the HRA.
When counting covered lives for an HRA, only employees are included. Exclude spouses and dependents.
3 methods for calculating PCORI Fee
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1)Actual method
This method considers the actual number of employees covered on each day of the plan year. This count is divided by the number of days in the plan year.
Formula: Total PCORI Fee = ((Sum of actual number of employees covered on each day of the plan year/number of days in the plan year) * Current PCORI fee per life
Example: A company has 20 employees employed for 365 days and 2 employees for 180 days.
Sum of employees = 20*365 + 2*180
= 7660
Current PCORI fee = 3.84
Total PCORI fee = (7660/365)*3.84
Total PCORI fee = $80.47
2)Snapshot Method
Under the Snapshot Method, a plan sponsor calculates the average number of lives covered by selecting a designated date in the first month of each quarter. For Q2–Q4, the date must be within 3 days of the Q1 date.
Total PCORI Fee = ((Total number of participants from designated dates)/4)*current PCORI fee per life
Example: Say the total number of participants covered on a designated date in each quarter are : 50, 45,55, and 35.
Sum of covered employees = 50+45+55+35 = 185
Current PCORI Fee = 3.84
Total PCORI Fee = ((185/4)*3.84))
Total PCORI Fee = $177.60
3)Form 5500 Method
The Form 5500 Method calculates the PCORI fee using the number of participants reported on the plan’s Form 5500. If the plan uses a level-funded self-insured option, this method may not apply, as Form 5500 may not be filed.
Formula: Total PCORI Fee = ((Total number of participants at the beginning of the year+Total number of participants at the end of the year)/2)* PCORI fee per participant
Example: Say the total number of employees at the beginning of the year is 50 and at the end of the year is 60.
Total PCORI fee = ((50+60)/2)*3.84)
Total PCORI fee = $220.80
Conclusion
Understanding how to calculate the PCORI fee is essential for all self-insured health plans. Accurate calculation ensures compliance with IRS requirements and avoids potential penalties. The Actual Count, Snapshot, and Form 5500 methods outlined in this guide provide clear approaches to determine your fee based on your plan’s structure.
Submit your PCORI Fee securely through our online PCORI Submission portal and stay compliant.
