PCORI fee HRA compliance is essential for small employers offering health reimbursement arrangements. Just a quick heads-up! If you’ve set up a Health Reimbursement Arrangement (HRA)—like a 105-HRA, a QSEHRA, or an ICHRA—to help your employees with medical costs, that’s awesome. You’re not just taking care of your team—you’re also scoring some pretty sweet tax benefits.
But here’s the thing… The IRS has a small rule that catches a lot of folks off guard: each year, you have to pay what’s called a PCORI fee (short for Patient-Centered Outcomes Research Institute). Don’t let the name scare you—it’s basically just a tiny fee that helps fund medical research. If you’ve set up a PCORI fee HRA, this small obligation is part of your compliance responsibility.
For more info, see IRS Form 720 Instructions.
It’s not a huge deal—but it is required, and it’s one of those things you definitely don’t want to miss. On the bright side, the fee is tax-deductible, and filing it shows your PCORI fee HRA plan is legit.
While the PCORI fee is small (often less than $100 total for small employers), ignoring it can trigger automated IRS notices—and potentially escalate into a compliance flag. (And who needs that?)
Even if the dollar amount is low, the paper trail matters. When you maintain proper records for your PCORI fee HRA, you ensure continued eligibility for HRA-related tax deductions and compliance protection.
Need help sorting it out, or want to talk through your HRA setup? Talk tax strategy with us - let’s talk tax strategy and more. We’re here when you are ready.