Pay Your PCORI Fee If You Have a 105-HRA, QSEHRA, or ICHIRA

Set Up an HRA for Your Team? Don’t Forget This Annual IRS Fee

If you’ve set up a 105-HRA, QSEHRA (Qualified Small Employer Health Reimbursement Arrangement), or an ICHRA (Individual Coverage HRA) to reimburse employees for medical expenses—first off, nice work. These plans are a smart, tax-efficient way to support your team’s health while scoring a business deduction.

But here’s the part that trips up a lot of business owners: every year, the IRS expects you to pay a small, often overlooked fee known as the PCORI fee (short for the Patient-Centered Outcomes Research Institute). The money goes toward research aimed at improving healthcare outcomes, which is great—but that doesn’t make the paperwork any more fun.

So how much are we talking?

Not much. For 2025 filings, the fee is $3.47 per “covered life” in your HRA during the prior plan year (which, for most, ended on December 31, 2024). There are a few IRS-approved methods you can use to calculate the number of people covered, so you’ll want to double-check which one applies to your situation. You’ll report and pay the fee by filing Form 720, and the deadline is July 31, 2025.

Is it annoying? A little. But worth it.

Sure, it’s another form to fill out—but paying the PCORI fee actually works in your favor. Not only is it tax-deductible, but it also helps document the legitimacy of your HRA plan in the eyes of the IRS.

Bottom line: If you’ve set up an HRA, make sure Form 720 is on your calendar for July. It’s a small fee that comes with big benefits—and it keeps your tax strategy airtight.

We provide these articles as general information and not individualized tax advice.  They do not constitute a client relationship with you, and any information provided here should be applied at your own risk.