Updated Form 720: For Purposes of Paying the PCORI Fee


Collection of the Patient-Centered Outcomes Research Institute (PCORI) fee will begin soon. The IRS has released an amended version of Form 720 that includes a section for self-funded plan sponsors to remit this fee.

The PCORI fee has emerged as a direct provision of PPACA. This fee funds research to identify and reduce unnecessary health care spending. Both fully-insured and self-funded plans are subject to this fee. For the first year, the fee is $1 per covered plan participant, this includes dependents.

  • For self-insured health plans, the fees are collected in the same manner as other taxes. The plan sponsor is responsible for filing Form 720.
  • For insured plans, the insurers are responsible for the fee and will collect it from policyholders. Policyholders with insured plans do not need to separately file Form 720.

If an employer sponsors a fully-insured medical plan and a self-funded plan such as a Health Reimbursement Account (HRA),btwo separate fees for each of these plans would apply. Note that to calculate the PCORI fee for HRA accounts, only covered employees are counted, not dependents.

For self-funded plan sponsors, IRS Form 720 must be completed and filed by July 31st of the calendar year immediately following the last day of the plan or policy year to which the fee relates. Plans that ended between October 1, 2012 and December 31, 2012 must file the Form 720 before July 31, 2013.

Self-insured plan sponsors are offered a choice between three methods for determining the average number of members covered under the plan for the plan year for purposes of applying this fee. These methods are the actual count method, snapshot count method and 5500 method. For more information on these methods, please reference the HRAT Summary of PPACA Fees That Impact Employer Groups at:


The new Form 720 can be accessed through:


Section II has been amended to include IRS No. 133, for employers to enter the average number of covered lives and calculate the applicable tax. Please reference section 720-V at the bottom of the form to enter your payment amount.

Instructions for filing out the Form 720 can be found at:


Note that the fees relevant to this portion of PPACA are Please consult your tax advisor for additional information.