IRS Announces 2025 PCORI Fee Update

The IRS has released the 2025 Patient-Centered Outcomes Research Institute (PCORI) fee, which will increase to $3.47 per covered life—a $0.25 increase from 2024. This fee applies to plan years ending on or after October 1, 2024, and before October 1, 2025.


What is the PCORI Fee?

The PCORI fee was introduced as part of the Affordable Care Act (ACA) to help fund the research conducted by the Patient-Centered Outcomes Research Institute (PCORI). This research focuses on improving healthcare outcomes by comparing different medical treatments. The fee is levied on insurers, as well as self-insured and level-funded health plans.


The fee is calculated based on the average number of covered lives under a plan and is due once a year, with the filing occurring during the second quarter on Form 720, the Quarterly Federal Excise Tax Return. The payment is due by July 31 each year.


Key Details for Employers and Plan Sponsors

  • Who is Affected?: The fee applies to health insurers, self-insured health plans, and level-funded health plans.


  • When is it Due?: The fee must be reported on Form 720 and paid by July 31 each year.


  • How is it Calculated?: The fee is based on the average number of covered lives during the plan year.


The updated $3.47 per covered life fee will be in effect for health plans with policy years ending between October 1, 2024, and October 1, 2025. Employers should be prepared to account for this increase when filing for 2025.


For more information on the PCORI fee and its reporting requirements, consult the IRS Bulletin 2024-49, published on December 2, 2024, or visit the IRS PCORI Fee page.

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