The Internal Revenue Service (IRS) has released Notice 2025-61 announcing an increase in the Patient-Centered Outcomes Research Institute (PCORI) fee for plan years ending between ending on or after Oct. 1, 2025, and before Oct. 1, 2026. The updated fee is $3.84 per average covered life 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.
Applicability of PCORI Fee
The PCORI fee was created by the Affordable Care Act (ACA) and first applied for plan or policy years ending on or after Oct. 1,2012. The fee is imposed on health insurance issuers and self-insured plan sponsors to fund comparative effectivenessresearch. The PCORI fee was originally scheduled to expire in 2019. However, a federal spending bill extended the PCORI feefor an additional 10 years. As a result, the PCORI fee will apply through the plan or policy year ending before Oct. 1, 2029.
Payment Deadline
PCORI fees are reported and paid annually on IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due each yearby 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.
Calculating the PCORI Fee
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 an HRA or FSA. Final rules outline several alternatives for issuers and plan sponsors to determine the average number of covered lives.
IRS Resources
The IRS provides the following resources on PCORI fees:
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.
