IRS Form 720 Update: What Benefit Plan Sponsors Need to Know About the 2026 PCORI Fee Filing

As the July 31^st filing deadline approaches, employers sponsoring self-insured health plans should be paying close attention to IRS Form 720. The IRS recently released both an updated Form 720 and revised instructions, including an increase to the Patient-Centered Outcomes Research Institute (PCORI) fee that applies to certain health plans.  

For many employers, this filing is easy to overlook because it is only required once per year, even though Form 720 is technically a quarterly federal excise tax return. In fact, the IRS specifically notes that employers filing solely for the PCORI fee need only file the second-quarter Form 720 by July 31^st.  

What’s New for 2026?

According to the updated IRS instructions, the PCORI fee increased from $3.47 to $3.84 per covered life for policy and plan years ending on or after October 1, 2025, and before October 1, 2026. The increase is reflected directly in the revised Form 720 and related instructions.  

The updated Form 720 now includes separate lines and fee rates for:

• Plan years ending before October 1, 2025 ($3.47 per covered life)
• Plan years ending on or after October 1, 2025, and before October 1, 2026 ($3.84 per covered life)  

Why Should Employers Care?

While the fee itself is relatively modest, compliance is important.

Employers that sponsor self-insured medical plans, level-funded plans, HRAs, ICHRAs, QSEHRAs, and certain other self-funded health arrangements are generally responsible for calculating, reporting, and paying the fee directly to the IRS.  

Employers with fully insured medical plans typically do not make the filing themselves because the insurance carrier is responsible for the PCORI fee payment.  

The IRS instructions also remind employers that penalties and interest may apply when required filings or payments are not submitted correctly or on time.  

What Should Employers Do Now?

Before July 31, employers should:

1. Determine whether any health plans are subject to the PCORI fee. Self-insured and level-funded arrangements commonly trigger the requirement.  
2. Calculate average covered lives using one of the IRS-approved counting methods.  
3. Verify the correct fee amount based on the plan year ending date. Many calendar-year plans ending December 31, 2025, will use the new $3.84 rate.  
4. Complete Form 720 and submit payment by July 31. The IRS encourages electronic filing and electronic payment whenever possible.  

How Navia Can Help

Keeping up with annual compliance obligations is one more responsibility competing for an HR team’s attention. Navia helps employers navigate the complexities of consumer-directed healthcare benefits and can assist clients in understanding:

• Whether their plan designs may be subject to the PCORI fee
• Which covered populations should be included in calculations
• Compliance considerations for HRAs, ICHRAs, and other self-funded health benefit arrangements
• Key filing deadlines and annual regulatory updates  

While employers remain responsible for filing Form 720 and remitting any fees owed, having a trusted benefits partner can help reduce confusion and streamline compliance.

The Bottom Line

The IRS’s latest Form 720 update primarily affects employers by increasing the PCORI fee to $3.84 per covered life. If your organization sponsors a self-insured or level-funded health plan, now is the time to review your plan data, calculate covered lives, and prepare for the July 31 filing deadline.