Under Obamacare (The Patient Protection and Affordable Care Act of 2010, a.k.a the “ACA”) a PCOR fee is applied to certain health plans. PCOR stands for “Patient-Centered Outcomes Research.” To learn more about what this is and what it does visit www.pcori.org/research-results-home

A PCOR fee applies annually for 1/1/2013 through 12/31/2019.


For employers or plan sponsors with self‐insured plans, the plan sponsor is responsible for filing and payment. This includes employers who offer –

  • Fully insured plans, and
  • Health reimbursement arrangements (“HRAs”).

If both of these apply, the employer will pay a PCOR fee for the employees on the fully‐insured plan AND the employer will pay a PCOR fee for the employees on the HRA. Employers pay only one PCOR fee per covered participant, so if someone, in this case, is a participant in both the fully insured plan and the HRA, only one PCOR fee will apply.

For employers and plan sponsors with only fully‐insured plans (such as UHC or BCBS), the health insurer will file the forms, and the fees will be built into their annual premiums.


  • Medical plans
  • Prescription drug plans
  • Self‐insurance dental or vision plans, if provided without a separate election or premium charge
  • HRAs (Health Reimbursement Accounts)
  • Retiree‐only health plans
  • Health plans of the types listed above provided by governmental employers for their employees


  •  Separately insured dental or vision plans
  •  Self‐insured dental or vision plans, if subject to separate coverage election and employee contributions
  • Expatriate coverage provided primarily for employees who work and reside outside the US
  • HSAs (Health Savings Accounts)
  • FSAs (Flexible Spending Accounts) other than HRAs
  • Employee Assistance Programs (EAPs), which are wellness programs and disease management programs that do not provide significant benefits in the nature of medical care or treatment
  • Government programs including Medicare parts A, B, C, and D, Medicaid, SCHIP, and programs covering the Armed Forces and Indian Tribes


The sponsor files and pays the PCOR fee on IRS form 720. This form is a quarterly excise tax return (filed in the calendar quarter, regardless of the employer’s year‐end). The PCOR fee is paid on form 720 for the second quarter ending 6/30, due on 7/31. The form reports the fee that is allocable to the prior calendar year.

The PCOR fee is reported on the first line of form 720, page 2, part II. Discussion of this filing requirement is on the form 720 instructions and begins on page 9 of that document.

Most of our clients are required to use EFTPS to make federal tax deposits, so they will have to use EFTPS to pay this fee. Thus, they should not wait until the last minute before 7/31 to address this payment mechanics to avoid it being late. Where the client uses a payroll tax service, they generally will be happy to make this deposit for you.


For plans with years ending before 10/1/2016, the fee is payable 7/31/2017 at $2.17 per participant ($2 plus an inflation index). For plans with years ending on or after 10/1/2016 but before 10/1/2017, the fee is payable 7/31/2017 at $2.26 per participant.


Employers must select one of the below methods for counting the number of covered lives. You can change the method
from year to year, but you must use the same method for all plans for any one year.

  • Actual count method. Count the number of covered individuals (employees, spouses, dependents) on each day of the plan year and divide by 365 (or 366).
  • Snapshot count method. Choose a specific date in each calendar quarter and count the number of lives covered on that day, then divide by 4. You must use the same date in each quarter (i.e., the first day of the quarter, or the first day of the second month of the quarter, or the last day of the quarter, etc.)
    • An alternate snapshot method provides that you count, once a quarter, the number of covered lives by counting the number of employees enrolled in single coverage, plus the actual number of employees enrolled in coverage that covers at least one family member. Divide that number by 4 and multiply by 2.35 to estimate the total number after family coverage.
  • 5500 method.
    • If the plan offers family coverage, take the number of covered lives at the beginning of the year plus the number at the end of the year as reported on the 5500. You do not average these numbers because the form 5500 does not count dependents.
    • If family coverage is not offered, take the number of covered lives at the beginning of the year plus the number at the end of the year and average these counts.

For HRAs, the count assumes that all coverage is single coverage, even if reimbursement is sought for the medical expenses of spouses and/or dependents. Thus the employer does not need to calculate the number of persons that benefit under each HRA plan participant.