Do Small Businesses Need to File PCORI Fees?

PCORI fees are a small but important employee benefits compliance responsibility for certain employers. If your business sponsors a self-insured medical plan or health reimbursement arrangement (HRA), you may need to calculate and report the fee each year using IRS Form 720. Capital Benefits, LLC helps small businesses across Northeast Georgia understand whether PCORI applies and prepare for the filing deadline.

For employers in Athens, Watkinsville, Bogart, Winder, Madison, and Jefferson, the first step is simple: identify what type of health benefits arrangement you offer. Many fully insured group health plans do not require the employer to file the PCORI fee directly, while self-funded arrangements often do.

What Is the PCORI Fee?

PCORI stands for the Patient-Centered Outcomes Research Institute. The federal PCORI fee helps fund research designed to give patients, clinicians, and employers better information about the effectiveness of medical treatments and health care options.

The fee is calculated based on the average number of covered lives under an applicable health plan. That includes not only enrolled employees, but also covered spouses and dependents when the plan-counting method requires them to be included.

Although the per-person amount is generally modest, overlooking the filing can create an unnecessary compliance issue. For a small business owner already managing payroll, hiring, benefits enrollment, and daily operations, PCORI is exactly the kind of annual requirement that can slip through the cracks without benefits administration support.

Which Small Businesses Must Pay PCORI Fees?

PCORI fees generally apply to issuers of certain health insurance policies and to plan sponsors of applicable self-insured health plans. For a typical small employer with a fully insured group health insurance plan, the insurance carrier is generally responsible for the fee associated with the insured medical policy.

However, an employer may have a separate filing responsibility when it sponsors a self-insured arrangement. Common examples can include:

• Self-funded group medical plans
• Level-funded plans that are treated as self-insured for PCORI purposes
• Health reimbursement arrangements, including certain individual coverage HRAs
• Other employer-funded medical reimbursement arrangements

The details matter. An HRA paired with a fully insured major medical plan may create a separate PCORI obligation for the employer, even though the carrier handles the fee for the underlying insured plan. This is one reason it is important not to assume that “we have group health insurance” automatically means there is nothing for the employer to file.

What Benefits Usually Do Not Trigger a PCORI Filing?

Not every employee benefit is subject to the PCORI fee. Plans that provide only excepted benefits are generally excluded. For many small businesses, that means standalone dental insurance, vision insurance, disability income coverage, and many health flexible spending arrangements are not typically subject to PCORI.

Employee assistance programs, wellness programs, and disease-management programs may also be excluded when they do not provide significant medical care or treatment benefits. The key is to evaluate the actual arrangement rather than relying only on its label.

At Capital Benefits, LLC, we help employers separate their medical-plan compliance responsibilities from benefits that are generally outside the PCORI rules. That practical guidance can be especially helpful for businesses offering a mix of group health, dental, vision, life, disability, and voluntary benefits.

How Much Is the PCORI Fee?

The PCORI rate changes periodically, so employers should always confirm the rate that applies to the specific plan year before filing. For plan years ending between October 1, 2025, and September 30, 2026, the applicable rate is $3.84 per average covered life.

For example, if an applicable self-insured plan had an average of 20 covered lives during that plan year, the estimated fee would be $76.80. The correct calculation depends on the plan’s average covered lives and the counting method used, not simply the number of employees on the payroll.

Employers should not automatically apply the $3.84 amount to plan years ending on or after October 1, 2026. The IRS adjusts the amount by plan-year period, and the applicable rate must be verified for the specific filing year.

When Is the PCORI Fee Due?

The PCORI fee is reported and paid annually on the second-quarter IRS Form 720, Quarterly Federal Excise Tax Return. The normal deadline is July 31 of the calendar year following the end of the applicable policy or plan year.

For example, a plan year ending during 2026 will generally have a PCORI filing deadline of July 31, 2027. Employers that file Form 720 only for PCORI generally do not need to file the form in the other quarters unless they have another excise-tax filing requirement.

Because July 31 is easy to miss during a busy summer, we recommend putting the deadline on your benefits compliance calendar well in advance. Keeping enrollment records, plan documents, and covered-life counts organized throughout the year can make the process much easier.

How Do Employers Calculate Average Covered Lives?

The IRS permits several methods for determining the average number of covered lives. Depending on the arrangement, employers may be able to use an actual count method, a snapshot method, or—in certain situations—a Form 5500 method.

For HRAs and certain flexible spending arrangements, special counting rules may apply. In some cases, an employer may count one covered life for each employee with the arrangement rather than counting each covered family member separately.

The best method is not always the same for every employer. The appropriate approach depends on the plan design, plan year, available records, and whether multiple self-insured arrangements can be treated together for PCORI purposes.

PCORI Filing Help for Northeast Georgia Employers

PCORI is not usually the largest line item in a benefits budget, but it is part of responsible employee benefits administration. Capital Benefits, LLC provides hands-on support for small businesses that want one dependable advisor for group health insurance, annual renewals, benefits requoting, enrollment, HR administration, and PCORI tax form preparation.

If your business has 5 to 50 employees and you are unsure whether your health plan, HRA, or reimbursement arrangement requires a PCORI filing, our team can help you review the setup and prepare for the next deadline. We serve employers throughout Watkinsville, Athens, and the surrounding Northeast Georgia communities with straightforward guidance—not a call-center experience.

FAQ

Do small businesses have to file PCORI fees?

Some do, but not all. Employers sponsoring applicable self-insured medical plans or HRAs may need to file. With a fully insured group health plan, the carrier generally handles the fee for the insurance policy.

Do dental and vision plans require a PCORI filing?

Standalone dental and vision plans that provide only excepted benefits are generally not subject to the PCORI fee. Employers should still review their specific benefit arrangement with a qualified advisor or tax professional.

What form is used to pay the PCORI fee?

Employers report and pay the fee using IRS Form 720, generally on the second-quarter return due July 31 following the end of the applicable plan year.

Is an HRA subject to the PCORI fee?

An HRA can be subject to PCORI, even when it is offered alongside a fully insured medical plan. The employer should review the HRA design and applicable counting rules before filing.

Can Capital Benefits help with PCORI filings?

Yes. Capital Benefits, LLC helps small businesses in Northeast Georgia understand their benefits compliance responsibilities and prepare PCORI tax forms as part of our ongoing benefits administration support.