PCORI Fee for Level-Funded Health Plans: Who Files & How
Are level-funded plans subject to the PCORI fee?
Yes. A level-funded plan is a self-insured health plan dressed up to feel like a fully-insured one: you pay a steady monthly amount that funds a claims account, with administrative services and stop-loss insurance bundled in. Because the employer ultimately bears the claims risk, the IRS treats it as an applicable self-insured health plan under IRC §4376 — exactly the category that owes the PCORI fee.
Why level-funded is different from fully-insured
This is where employers get caught. With a fully-insured plan, the insurance carrier pays the PCORI fee — you do nothing. With a level-funded (self-insured) plan, the carrier handles claims and stop-loss, but the plan sponsor — you, the employer — is the one liable for the PCORI fee and for filing Form 720. The monthly bill looks like premium, so many employers assume the carrier files it. They generally don't.
How to count covered lives for a level-funded plan
Because a level-funded plan is a self-insured medical plan, you count all covered lives — employees and their covered dependents (this is different from an HRA, where you count one life per employee). Use one of the IRS methods: actual count, snapshot, or the Form 5500 method. Then multiply the average by the rate:
- $3.84 per covered life — plan years ending Oct 1, 2025 – Sep 30, 2026
- $3.47 per covered life — plan years ending Oct 1, 2024 – Sep 30, 2025
Example: a level-funded plan averaging 120 covered lives with a plan year ending December 31, 2025 owes 120 × $3.84 = $460.80. Our covered-lives guide walks through each counting method, and the PCORI calculator does the math.
What about the stop-loss policy?
Good news: the stop-loss policy is generally not separately subject to the PCORI fee. Stop-loss reimburses the employer for large claims — it doesn't provide health coverage to individuals — so it isn't a "specified health insurance policy." You pay the fee once, on the underlying self-insured plan. No double counting.
How to file and pay
The PCORI fee is reported on the second-quarter Form 720 (IRS No. 133, lines 133(c)/(d) for self-insured plans), due July 31, 2026. There's no EFTPS deposit — you pay with the return. If PCORI is your only Form 720 item, you only file the Q2 return. One compliance note: the IRS/DOL position is that the PCORI fee is an employer obligation and is paid from the employer's general assets, not from plan assets.
See the full PCORI fee filing guide, and if you handle plans for several employers, our filing for firms & TPAs page covers filing for many clients from one dashboard.
FAQ
Do level-funded health plans owe the PCORI fee?▼
Yes. A level-funded plan is a self-insured health plan, so it is an applicable self-insured health plan under IRC §4376. The plan sponsor — the employer — is liable for the PCORI fee and files it on Form 720, even though the plan is administered by a carrier.
Does my insurance carrier file the PCORI fee for a level-funded plan?▼
Usually no. With a fully-insured plan the carrier pays the PCORI fee. With a level-funded (self-insured) plan, the employer is the plan sponsor and is responsible for filing Form 720 and paying the fee — even though a carrier handles claims and provides stop-loss coverage. Some administrators help calculate covered lives, but the legal filing obligation stays with the employer.
How do I count covered lives for a level-funded plan?▼
Count all covered lives — employees and their covered dependents — using one of the IRS methods (actual count, snapshot, or the Form 5500 method). Unlike an HRA, you do not count just one life per employee. The average is multiplied by the applicable rate ($3.84 for plan years ending Oct 1, 2025 – Sep 30, 2026).
Is the stop-loss policy on a level-funded plan subject to the PCORI fee?▼
Generally no. Stop-loss insurance reimburses the employer, not individuals, so it is not treated as a specified health insurance policy subject to the PCORI fee. Only the underlying self-insured plan owes the fee — you do not pay twice.
When is the level-funded PCORI fee due?▼
July 31, 2026 for plan years that ended in 2025. The PCORI fee is reported once a year on the second-quarter Form 720 (lines 133(c)/(d) for self-insured plans), with no EFTPS deposit — you pay it with the return.
File your level-funded PCORI fee
EasyFile720 supports PCORI-only filers — enter your covered lives, we pick the right line (133c/133d) and e-file IRS No. 133 directly to the IRS before July 31.
This article reflects IRS Notice 2025-61, the Instructions for Form 720 (Rev. June 2026), and the PCORI regulations under IRC §§ 4375–4377. Whether a specific arrangement is self-insured and how stop-loss is treated can be fact-specific — confirm your plan with a qualified advisor. General information, not tax advice.
