One of the most common sources of PCORI confusion among employers is also one of the most straightforward to resolve: whether the obligation to file and pay belongs to the employer or the insurance carrier depends entirely on how the health plan is structured.
If your plan is fully insured, your carrier handles it. If your plan is self-insured, you handle it. That distinction sounds simple, but the lines blur quickly when employers have mixed arrangements, mid-year plan changes, or HRAs layered on top of a fully insured medical plan.
This post explains the difference between fully insured and self-insured plans for PCORI purposes, when the obligation shifts to the employer, and a practical checklist to help you determine your filing status for the 2025 and 2026 plan years.
How Fully Insured Plans Work for PCORI
When an employer purchases a fully insured group health plan from a licensed insurance carrier, the carrier assumes the financial risk for employee claims and pays a fixed premium to provide coverage. For PCORI purposes, the carrier is treated as the issuer of a specified health insurance policy and bears the obligation to file Form 720 and pay the PCORI fee.
As a result, fully insured employers do not need to file Form 720 or pay the PCORI fee directly. The carrier calculates the fee based on its covered lives, files the return, and remits payment to the IRS. The cost is typically factored into the premium the employer pays, but the filing obligation belongs entirely to the carrier.
This arrangement covers the most common type of fully insured health plan: standard group medical coverage purchased from a commercial carrier such as UnitedHealthcare, Aetna, BCBS, Cigna, or any state-licensed insurer.
How Self-Insured Plans Trigger the Employer Filing Obligation
When an employer sponsors a self-insured health plan, the employer bears the financial risk for employee health claims directly, typically with stop-loss insurance to cap exposure on catastrophic claims. For PCORI purposes, a self-insured plan is treated as an applicable self-insured health plan, and the plan sponsor, which is the employer, is responsible for filing Form 720 and paying the PCORI fee.
Self-insured arrangements subject to the PCORI fee include:
- Self-insured group medical plans, including PPO, HMO, and fee-for-service structures funded directly by the employer
- Level-funded health plans, which are considered self-insured for PCORI purposes even though they resemble fully insured plans in their premium structure
- Health Reimbursement Arrangements (HRAs) of most types, including integrated HRAs, stand-alone HRAs, Qualified Small Employer HRAs (QSEHRAs), and Individual Coverage HRAs (ICHRAs)
- Multiple Employer Welfare Arrangements (MEWAs) that are self-funded
- Retiree-only health plans that are self-insured
The employer’s obligation exists regardless of company size. There is no small-employer exemption. A company with 12 employees and a self-insured plan owes the PCORI fee just as much as a company with 12,000.
The Level-Funded Plan Trap
Level-funded plans deserve special attention because they are the most frequently misclassified plan type in the PCORI context.
A level-funded plan charges a fixed monthly amount per employee, which can make it feel and look like a fully insured plan at renewal. But the underlying structure is self-insured: the employer funds claims up to a stop-loss threshold, and the level payment is simply a budgeting mechanism. The carrier administers claims but does not bear the primary risk.
Because level-funded plans are self-insured arrangements, the employer, not the carrier, is responsible for the PCORI filing and payment. Employers who switched to a level-funded plan from a fully insured arrangement and assumed their carrier was still handling PCORI should verify this with their TPA or benefits broker immediately. The July 31 deadline does not pause for misunderstandings about plan structure.
The HRA Complication: When a Fully Insured Employer Still Owes PCORI
This is the scenario that catches the most employers off guard: a company with a fully insured major medical plan that also offers a Health Reimbursement Arrangement.
Because an HRA is a self-insured arrangement, the employer is responsible for the PCORI fee on the HRA component, even if the major medical plan is fully insured and the carrier is handling PCORI for that portion. The two obligations are separate.
The specific rules governing the HRA PCORI calculation are as follows:
Fully insured medical plan paired with an HRA. The employer owes PCORI on the HRA. Covered lives for the HRA are counted using only enrolled employees, not their dependents. The IRS allows the plan sponsor to assume one covered life per enrolled employee for the HRA count.
Self-insured medical plan paired with an HRA (same plan sponsor, same plan year). The HRA is disregarded for PCORI purposes. The employer calculates covered lives only once, based on the self-insured medical plan, and pays a single PCORI fee. The HRA does not generate a separate obligation.
Self-insured medical plan paired with an HRA that covers employees not in the medical plan. The employer calculates covered lives on the medical plan as usual, then adds any additional employees covered by the HRA but not enrolled in the self-insured medical plan.
The practical takeaway: any employer offering an HRA should confirm whether it triggers a separate PCORI obligation, regardless of whether the major medical plan is fully insured or self-insured.
What Happens When a Plan Changes Mid-Year
Employers who switch from a fully insured to a self-insured arrangement mid-plan-year have a PCORI obligation for the self-insured portion of the year. The PCORI fee is calculated based on the average covered lives during the plan year that the self-insured arrangement was in effect.
Similarly, employers who terminate a self-insured plan and move to a fully insured carrier mid-year still owe PCORI for the period when the plan was self-insured. Short plan years do not receive a prorated rate exemption. The full fee based on average covered lives during the self-insured period applies.
If you are unsure how a plan transition affects your PCORI obligation, your TPA, benefits broker, or CPA should be able to clarify the applicable period and calculation method.
Current PCORI Fee Rates for 2025 and 2026 Filings
Two rates are currently in effect, confirmed by the IRS:
- Plan years ending on or after October 1, 2024, and before October 1, 2025: $3.47 per covered life (IRS Notice 2024-83). Filings for these plan years were due July 31, 2025.
- Plan years ending on or after October 1, 2025, and before October 1, 2026: $3.84 per covered life (IRS Notice 2025-61). This is the largest single-year rate increase to date. Filings for these plan years are due July 31, 2026.
For most calendar-year plans ending December 31, 2025, the applicable rate is $3.84 per covered life, with a filing deadline of July 31, 2026.
Checklist: Determining Your PCORI Filing Obligation
Work through the following questions to determine whether your organization owes the PCORI fee for the current plan year:
- Is your group health plan fully insured (purchased from a licensed carrier at a fixed premium)? If yes, your carrier handles PCORI. Stop here unless you also have an HRA.
- Is your group health plan self-insured, level-funded, or does it include a self-funded component? If yes, your organization owes the PCORI fee.
- Do you offer a Health Reimbursement Arrangement of any type? If yes, determine whether it is paired with a self-insured major medical plan (same plan sponsor, same plan year). If it is, the HRA is disregarded and you pay one PCORI fee on the medical plan. If it is paired with a fully insured major medical plan, you owe a separate PCORI fee on the HRA using the one-life-per-enrolled-employee counting rule.
- Did your plan structure change during the plan year (fully insured to self-insured, or vice versa)? If yes, calculate covered lives only for the period during which the self-insured arrangement was in effect.
- Have you verified the correct fee rate for your plan year end date ($3.47 or $3.84 per covered life)?
- Is your filing due date July 31, 2026, for plan years ending on or after October 1, 2025?
File in Minutes with Akore Federal
If your organization has a self-insured health plan or an HRA that triggers a PCORI obligation, Akore Federal makes the filing process fast and accurate. The platform applies the correct fee rate automatically based on your plan year end date, walks you through the covered lives calculation, populates IRS Form 720 Schedule B, and submits directly to the IRS with electronic acknowledgment.
Whether you are a self-insured employer filing for your own plan, or an employer with a fully insured medical plan and a stand-alone HRA, Akore Federal is built for both scenarios.
Start your PCORI filing at AkoreFederal.com.
Not sure whether your health plan structure triggers a PCORI obligation? Contact the Akore Federal compliance support team or explore our Form 720 resource library for guidance on self-insured, level-funded, and HRA arrangements.
