Complete Guide to PCORI Fee Rates for All Years

• PCORI rates are adjusted annually based on the plan year ending date.
• Self-insured health plans generally report and pay PCORI fees through IRS Form 720.
• Applicable PCORI rates vary each year, making accurate calculations essential for compliance.
• The fee is calculated by multiplying covered lives by the applicable annual rate.
• Timely Form 720 filing helps avoid penalties and keeps IRS reporting requirements on track.

Why Keeping Track of PCORI Fee Rates Matters

The Patient Centered-Outcome Research Institute (PCORI) fee was established as a requirement for the health insurance industry and is a tax levied by the IRS on the basis of the type and number of patients served by the insurance company or self-insured health plan through the year.

Even though the level of individual fee is rather modest, it is vital that the appropriate annual rate is used for fee calculation. The IRS modifies the level of the fee every year; therefore, the use of a dated rate when filing can cause the wrong amount of tax, the need for amendments, delays, or even worse outcomes!

Companies, TPAs, employers, and tax consultants who do filings related to the IRS Form 720 should double-check the latest effective rate before submitting their quarterly excise tax return, if applicable.

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PCORI Fee Rates by Plan Year

Plan Year Ending Between	PCORI Fee Rate (Per Covered Life)
Before October 1, 2013	$1.00
October 1, 2013 – September 30, 2014	$2.00
October 1, 2014 – September 30, 2015	$2.08
October 1, 2015 – September 30, 2016	$2.17
October 1, 2016 – September 30, 2017	$2.26
October 1, 2017 – September 30, 2018	$2.39
October 1, 2018 – September 30, 2019	$2.45
October 1, 2019 – September 30, 2020	$2.54
October 1, 2020 – September 30, 2021	$2.66
October 1, 2021 – September 30, 2022	$2.79
October 1, 2022 – September 30, 2023	$3.00
October 1, 2023 – September 30, 2024	$3.22
October 1, 2024 – September 30, 2025	$3.47
October 1, 2025 – September 30, 2026	$3.84

How the Fee Is Calculated for Form 720

After the identification of the correct annual rate, computing the PCORI fee is a matter of a few simple steps.

The formula is:

Number of Average Covered Lives × Applicable PCORI Fee Rate = Total Fee

For example, if a self-insured health plan has 350 covered lives and the applicable fee rate is $3.65, the total PCORI fee would be:

350 × $3.65 = $1,277.50

The IRS allows several ways of counting the average number of covered lives to be used in the determination of the fee:

• Actual Count Method
• Snapshot Method
• Form 5500 Method (when applicable)

Choosing one that is approved and figuring out the correct annual rate goes a long way in helping to get the Form 720 reported accurately.

Filing the PCORI Fee Through Form 720

The PCORI fee is reported through the IRS Form 720 or the Quarterly Federal Excise Tax Return. Although Form 720 is quarterly, the PCORI fee is most of the time filed only once each year during the second-quarter filing.

Some of the important points to bear in mind regarding the filing include:

• Enter the fee amount in the corresponding section of Form 720.
• Base the fee rate on the date on which the plan year ends, if possible.
• Determine a fee amount by dividing the number of covered lives by the number of days in a year.
• Remit the payment along with the filing by the time limit set by the IRS.
• Keep all your backup papers safe in case the IRS ever questions your figures.

When you get all details correctly prepared, that reduces the probability of errors, saves on costs, and, at a time, helps organizations meet their federal excise tax requirements.

Common Filing Mistakes

Many filing mistakes happen not because people are not good at math or the law, but because they simply make mistakes they do not realize. The most frequently made filing mistakes are:

• Basing the fee on an incorrect annual fee rate
• Mixing up a plan year and a calendar year
• Mistakenly counting the average number of covered lives
• Submission of the IRS Form 720 version that no longer meets the requirements
• Delaying or missing the annual filing deadline

By reviewing the plan year that you are referring to, or at least having a good look at your calculation steps for any errors, you can avoid the situations described above.

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Stay Current and File With Trust

To remain in compliance with the regulations, the IRS regularly adjusts the level of the fee, which means that having an up-to-date list of PCORI rates will help you file the PCORI Fee Return and IRS Form 720 correctly without any mistakes. Either as a business that is the only owner of a self-insurance plan or a group health plan, or as a tax consultant handling several clients at once, the correct rate guarantees compliance and makes everything much simpler.

The use of eFile720 is very much recommended if the goal is to file the Form 720 efficiently and at the lowest possible error rate. Through eFile720, one can take advantage of a fully automatic filing system that has been customized for handling excise tax return filings and so forth. Making use of annual fee updates and relying on a trustworthy filing service is probably the best way to make the whole PCORI reporting hassle-free.

FAQs

1. Which PCORI rate should I use for my Form 720 filing?

Use the PCORI rates that correspond to your health plan's ending date, not the date you file Form 720.

2. How often are PCORI fee rates updated?

The IRS generally adjusts the fee annually based on increases in national health expenditures and publishes the updated amount before the next filing cycle.

3. Where can I find the latest PCORI rates before filing?

You can verify the latest PCORI rates through official IRS guidance or use reliable Form 720 e-filing platforms such as eFile720 that provide current filing information and updated fee schedules.