Penalties and Consequences of not filing PCORI Fee (in 2026)
2)The PCORI fee rate is updated annually per covered life (e.g., $3.47–$3.84 for 2025 plan-end periods depending on timing).
3)The PCORI fee is due with Form 720 by July 31, 2026, for the applicable plan year ending in the prior calendar year.
4)Not filing or not paying on time could attract IRS penalties, interest rates, and even waiver of the payment on proving reasonable cause only.
5)There are other consequences of non-compliance such as damaging reputation, increased risk of audits, and even inability to file again with the IRS.
6)Use of electronic filing on IRS approved sites is highly encouraged when filing for PCORI fees.
PCORI Fee - Key Details
The Patient Centered Outcomes Research Institute (PCORI) fee is an annual excise tax imposed by the Internal Revenue Service (IRS) to finance medical studies.
Applicable Law: Under the Affordable Care Act (ACA) Section 6301.
Effective Years: Applies for plan years ending after October 1, 2012.
Who Pays: Health insurers and employers sponsoring self-insured plans.
PCORI Fee Rate (2026):
$3.47 per covered life for policies ending Jan–Sep 2025
$3.84 per covered life for policies ending Oct–Dec 2025
When is the PCORI Fee Due?
The PCORI Fee is due annually with Form 720. For 2026 filings:
Deadline: Friday, July 31, 2026
Example: A plan ending on December 31, 2025, must file the fee by July 31, 2026.
Consequences of Not Filing the PCORI Fee
Failing to file the PCORI Fee on time can create serious problems. The IRS treats this fee like any other excise tax.
Failure to File Form 720: A penalty of 5% of the unpaid tax is assessed for each month (or part of a month) that the return is late, up to a maximum of 25%. If the return is not filed within 60 days after the deadline, the minimum penalty is $100, or the total amount of tax due, whichever is less.
Failure to Pay the Tax: If the return is filed but the tax isn’t paid on time, a separate penalty applies at 0.5% of the unpaid tax for each month (or part of a month), up to 25% maximum. The Internal Revenue Service (IRS) charges interest on any unpaid amounts daily.
A Taxpayer who files and pays late may be subject to multiple penalties. If a Taxpayer can show reasonable cause for late payments or failure to file; the IRS can waive its failure to file and/or failure to pay penalties.
Other Consequences
Beyond penalties, failing to file or pay the PCORI Fee can affect your organization in many practical ways:
Damage to Reputation: Your company’s reputation may suffer if you continue to file late or miss deadlines. This will lead to a negative image of you in the eyes of your employees, customers, and other stakeholders and cause them not to trust that you are complying with regulatory requirements.
Higher Risk of IRS Audits: When you do not follow regulations, there is a greater chance of being audited by the IRS. Audits take a lot of time and resources to complete.
Restrictions on Future Opportunities: If your organization does not comply with deadlines for filing required documents, they may not be able to receive future offers or even receive favorable treatment from the IRS in the future for excise taxes.
Noncompliance Implications: Failing to meet IRS filing deadlines can cause delays in the approval of future filings and limit your ability to request extensions or set up payment plans. Such noncompliance can create unnecessary administrative challenges and complicate your interactions with the IRS.
What To Do Once You Receive An IRS Penalty Notice
1)To begin with, do not panic. Read the entire penalty notice from the IRS to understand the exact nature of the penalty imposed on you. The IRS explicitly mentions what the type of penalty is and its cause in the notice; also, you can check out the official IRS penalty guidelines webpage for better understanding.
2)Once you have figured out the reason for the penalty, act quickly. If the reason for the penalty is that you did not make full payment of the tax, then paying the tax immediately will help avoid additional penalties and interest rates.
3)In case there is an error in your submission, you can correct the mistake using Form 720-X, which is an amended return.
4)In some cases, you may qualify for IRS first-time penalty abatement relief if you have maintained a clean compliance history for the past three years and meet the eligibility conditions along with a valid reasonable cause.
5)Lastly, if the mistake is due to unforeseeable or unavoidable reasons, then there is a possibility of applying for abatement by proving your case before the IRS.
Conclusion
Filing your PCORI Fee electronically through an IRS-authorized portal is the easiest and safest way to avoid penalties, interest, and other negative consequences. You will find that using Simple720 provides you with an accurate, secure, and timely filing. You will also receive automated calculations and guidance through each step providing you the freedom to operate your business without the concern of being compliant. Act now.
File your PCORI Fee Online using Simple720 Now!
