PCORI Fees: What ICHRA Employers Need to Know
PCORI Fees: What ICHRA Employers Need to Know
The PCORI (Patient-Centered Outcomes Research Institute) fee is a small annual federal excise tax that helps fund research comparing the effectiveness of medical treatments. Because an ICHRA is a self-insured health plan, employers offering one are responsible for reporting and paying this fee directly to the IRS — it isn't handled by an insurance carrier.
Who Pays
The employer (plan sponsor) is responsible for the fee, not StretchDollar or the ICHRA administrator. This applies even to companies with just one ICHRA participant.
How It's Calculated
- Per covered life — for ICHRAs, only enrolled employees count (not spouses or dependents).
- Current rate: $3.84 per covered life for plan years ending October 2025–September 2026, set annually by the IRS.
Filing Requirements
- Reported on IRS Form 720 (Quarterly Federal Excise Tax Return), filed once a year using the second-quarter version.
- Due by July 31 for plan years ending in the prior calendar year.
- Late filing penalty: 5% of unpaid tax per month, up to 25%.
Where to Find Covered-Life Data
Employers can pull the information needed to complete Form 720 from their 1095-B, available on the Documents tab in the StretchDollar portal. It reflects enrolled employees by month, which employers can use to calculate their average covered lives for the plan year.
Tip: This fee is a deductible business expense. Employers should confirm plan year-end dates and covered-life counts with their TPA before filing.