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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

As a reminder, the deadline for submitting Patient-Centered Outcomes Research Institute (PCORI) fees is July 31. Employers that sponsor self-insured group health plans should use the most current revision of IRS Form 720, Quarterly Federal Excise Tax Return, to report and pay the fees.

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Insurance carriers are responsible for paying the PCORI fee on behalf of a fully insured plan, but employers must pay the fee for any self-insured medical benefits, including general-purpose health flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs). For plans that offer a mix of fully insured and self-insured benefits, both the insurer and the employer must pay fees.

The fee due depends on when your most recent plan year ended:

For plan years that ended between Jan. 1, 2025, and Sept. 30, 2025, the fee is $3.47 per covered life.

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For plan years that ended between Oct. 1, 2025, and Dec. 31, 2025, the fee is $3.84 per covered life.

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The IRS allows plan sponsors to choose one of three alternative methods to determine the average number of covered lives for the year:

Actual count method: The total number of lives covered on each day of the plan year divided by the total number of days in the plan year.

Snapshot method: Average the total number of lives covered on select dates each quarter. Employers may use either the total number of lives covered on each date or a factored method that on each date uses the number of participants with self-only coverage plus 2.35 times the number of participants with any other coverage.

Form 5500 method: Use the number of participants reported on Form 5500. For plans with self-only coverage, an employer must add the total number of participants at the beginning and end of the plan year and divide by two. For plans with self-only and dependent coverage, employers must add the total number of participants at the beginning and end of the plan year without dividing.

In determining the number of covered lives, plan sponsors must count anyone covered under their self-insured medical programs, including former employees and their dependents who participate under the Consolidated Omnibus Budget Reconciliation Act (COBRA) or other post-employment coverage. All self-insured benefits may be treated as a single plan. Also, employers can treat health FSAs and HRAs as providing self-only coverage.

If you have questions about calculating the number of covered lives or any other issues pertaining to PCORI fees or the Affordable Care Act, please contact <a href="https://www.wnj.com/people/stephanie-h-grant/">Stephanie Grant</a>, <a href="https://www.wnj.com/people/deandre-l-robbins/">De’Andre Robbins</a> or your Warner attorney.

Senior Counsel

Stephanie H. Grant

Associate

De’Andre L. Robbins

Employee Benefits

Labor and Employment

Group Health Plan PCORI Fees Due by July 31

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Group Health Plan PCORI Fees Due by July 31

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