PCORI Fees Just Jumped 10.7%. Here's How to File Form 720 Before July 31.

The Rate Went Up. Most Plan Sponsors Don't Know Yet.

The PCORI fee for plan years ending October 1, 2025 through September 30, 2026 is $3.84 per covered life. That's up from $3.47 last year, a 10.7% jump.

If your accruals haven't moved, you're already behind.

Self-insured plans, HRAs, and retiree-only plans all owe this fee. That includes level-funded plans, which carriers often market as self-funded equivalents but still carry self-insured plan obligations under ERISA. If you're not sure whether your plan qualifies as self-insured for PCORI purposes, that distinction matters. Short plan years count too. There's no exemption for being small or having a simple plan design.

The deadline is July 31, 2026. Miss it, and the IRS treats the payment as late. That means penalties and interest.

Three Ways to Count Covered Lives

Before you touch Form 720, you need your average covered lives. The IRS approves three methods. Which method fits your plan?

• Actual Count Method. Add up covered lives for every day of the plan year, then divide by the number of days. Most accurate. Most work.
• Snapshot Method. Pull covered lives from one date each quarter of the plan year. Average those four numbers. Easier for most mid-market plans.
• Form 5500 Method. Use the participant counts already reported on your Form 5500. Works well if your 5500 data is clean and filed on time.

Document which method you used. If the IRS questions your filing, you'll need to show your work. If errors span multiple plan years, each year needs its own corrected Form 720.

How to Complete Form 720, Step by Step

Form 720 is a quarterly excise tax return. You only file the second-quarter return for PCORI.

You don't need to file first, third, or fourth quarter returns if PCORI is the only thing you're reporting.

Here's what goes where.

• Fill in your organization's name, address, and EIN in the form heading. Set the quarter ending date to June of the filing year.
• Go to Part II. Find IRS No. 133. Self-insured plan sponsors with plan years ending on or before September 30 of the preceding calendar year use line 133(c).
• Enter your average covered lives on that line. Multiply by the applicable rate. For most plans filing by July 31, 2026, that's $3.84 per covered life.
• Carry the total to the summary section and calculate what you owe.

Double-check your EIN. A wrong EIN is one of the most common reasons the IRS flags a filing as incomplete.

How to Pay

PCORI fee deposits aren't required through EFTPS. That's different from payroll taxes. You have options.

• Pay electronically through EFTPS or IRS Direct Pay. If you use EFTPS, apply the payment to the second quarter.
• Mail a check or money order with Form 720-V, the payment voucher. Make it payable to the United States Treasury.

Electronic is faster and creates a cleaner paper trail. Either way, the payment must be received by July 31, 2026, not postmarked.

If you file electronically, submit Form 720 through the IRS e-file system or a third-party tax software provider that supports excise tax returns. Confirm your provider supports Form 720 before assuming it's covered.

What CFOs Should Do Right Now

The fee jumped from $3.47 to $3.84. If you have 400 covered lives, that's a $148 difference this year alone. The compliance risk of a late filing is the real exposure.

Pull your covered-life count now. Confirm your plan administrator is using a documented, IRS-approved calculation method. Check your accruals against $3.84 per life, not last year's rate.

Get the second-quarter Form 720 filed and paid before July 31.

One more thing. If you made an error on a prior year filing, don't ignore it. The IRS can treat both the filing and payment as late, and each plan year needs its own corrected return.

The fee itself is manageable. The penalty for getting it wrong isn't.