PCORI Fee – Updated Form 720

The IRS released the updated Form 720 for the 2024 second quarter with updated dates and fees on Line 133 for reporting the PCORI fee. You can find the form, with a revision date of June 2024, here – https://www.irs.gov/pub/irs-pdf/f720.pdf

Employers who sponsored self-funded medical plans that ended sometime during 2023 are required to report and pay the ACA Patient-Centered Outcomes Research Institute (PCORI) fee no later than July 31, 2024. Form 720 should be filed for the 2nd quarter ending June 30th, 2024.


General summary information for PCORI fees can be found at https://www.irs.gov/newsroom/patient-centered-outcomes-research-institute-fee. Health insurance carriers pay the fee on behalf of fully-insured plans, but employers are responsible for reporting and paying the fee for any self-funded group health plans, including HRAs. The PCORI fee applies to most group health plans, including retiree-only plans, but not to excepted benefits. The IRS published a chart that describes the different types of plans subject to the fee here – https://www.irs.gov/newsroom/application-of-the-patient-centered-outcomes-research-trust-fund-fee-to-common-types-of-health-coverage-or-arrangements

The fee is paid for self-funded group health plans using quarterly excise tax Form 720, Line 133(c) and (d), and must be paid by July 31st of the year following the last day of the plan year. The PCORI fee should be reported in the 2nd quarter of the calendar year following the end of the plan year, rather than filing sooner, to avoid any confusion for the IRS over which plan year the reporting applies to. If any corrections need to be made for prior years, use Form 720X.

Fee Amount

Payment amounts due in 2024 will differ based on the employer’s plan year. The IRS put together a chart showing applicable fee amounts depending on the plan year end date at https://www.irs.gov/affordable-care-act/patient-centered-outreach-research-institute-filing-due-dates-and-applicable-rates . The fees due in July 2024 are as follows:

  • $3.00 per covered life for plan years ending in January – September 2023.
  • $3.22 per covered life for plan years ending in October – December 2023.

Calculating the Average Covered Lives

Self-funded plans may use one of three methods to determine the average covered lives used for reporting and paying the PCORI fee: (i) the actual count method; (ii) the snapshot method; or (iii) the Form 5500 method. It is okay to switch between counting methods from one year to the next to use whichever method results in the lowest number of covered lives.

There are special rules that apply for employers offering multiple self-funded plans and for employers paying the fee for a stand-alone HRA or for an HRA integrated with a fully-insured plan. These special counting rules are outlined below.

Multiple Self-Funded Plans – If one plan sponsor maintains more than one self-funded health plan with the same plan years, the arrangements can be treated as a single plan for purposes of the fee, in which case each unique participant is counted for purposes of calculating the fee. For example, if the employer offers a self-funded group medical plan and an HRA, where the participants in both plans are the same, the PCORI fee is calculated based on the covered lives in the self-funded group medical plan (the HRA is disregarded).

HRAs – For an employer paying the PCORI fee solely for an HRA, the employer is required to pay the fee only with respect to participating employees (not required to count dependents or beneficiaries).