If you reimburse your employees for medical expenses through a Health Reimbursement Arrangement (HRA)—such as a 105-HRA, a QSEHRA (Qualified Small Employer Health Reimbursement Arrangement), or an ICHRA (Individual Coverage Health Reimbursement Arrangement)—you’re offering a fantastic benefit that helps your team while earning your business a tax deduction. Well done!
But here’s something you may not know: The IRS requires a small, annual fee for these kinds of plans, called the PCORI fee.
What Is The PCORI Fee?
The Patient-Centered Outcomes Research Institute (PCORI) was created to fund research that helps patients and doctors make better healthcare decisions. To support this research, the IRS requires certain health plans—including HRAs—to pay a yearly fee. For 2025, the fee is $3.47 per person covered by your HRA during the previous plan year (most likely the calendar year ending December 31st, 2024).
What Do You Need to Do?
To stay compliant, you’ll need to:
Calculate the average number of people covered by your HRA
File IRS Form 720 and pay the fee by July 31st of the calendar year following the end of your plan year (July 31st, 2025, for plans with a December 31st, 2024, year-end).
While the fee itself is fairly small, missing the deadline or skipping the filing can result in penalties—so it’s important not to overlook it.
The Upside
Even though it’s a bit of a hassle, paying the PCORI fee has a few silver linings:
It helps confirm your plan exists, which is useful if the IRS ever asks.
The cost is fully tax-deductible for your business.
Next Steps
If you have questions or aren’t sure whether this applies to your business, we’re happy to help you review your HRA setup and make sure you’re covered. Need help filing Form 720 or calculating your PCORI fee? Reach out to the team at TrueBlaze — we’ve got your back.
You can find Form 720 and instructions on the IRS site here:
Form 720
Form 720 Instructions