ICHRA Frequently Asked Questions2020-01-07T14:12:16-06:00

ICHRA
Frequently Asked Questions

What is ICHRA Administration?2019-11-13T10:57:53-06:00

Flyte HCM’s ICHRA Administration is a product designed to deliver on the federal ruling, ICHRA. ICHRA stands for Individual Coverage Health Reimbursement Arrangement and is a set of rules allowing businesses of all sizes to contribute to the cost of individual policies owned by your employees.

Where did ICHRA come from?2019-08-28T08:06:16-05:00

For years, HRAs had been a popular solution for businesses who wanted to reimburse their employees’ healthcare expenses. The Affordable Care Act (ACA) changed that, significantly limiting a business’s ability to offer HRAs for individual policies.
In 2017, an Executive Order was issued directing the Departments of Treasury, Health and Human Services, and Labor to expand business’s use of HRAs once again. In June of 2019, new rules were released, establishing ICHRA as an option for 2020.

What are the Benefits of ICHRA Administration?2019-11-13T10:54:29-06:00
  • Employers contribute money towards their employee’s individual medical insurance tax-free.
  • Employees coverage is specific to their needs.
  • Overall benefits costs are in the control of the company.
  • Simple and cost-effective administration.
  • ICHRA Administration is a great way to attract and retain valuable employee relationships.
How does ICHRA Administration Work?2019-11-13T10:53:26-06:00
  • Employers choose a plan design that meets their business needs.
  • Employees choose individual insurance based on their needs.
  • Employees submit their expenses for reimbursement as per the ICHRA Plan design.
  • Employee receives reimbursement directly into the bank account of their choice.
Is ICHRA Administration a compliant solution?2019-11-13T10:52:16-06:00

Yes! ICHRA Administration is compliant with all existing and applicable laws. Flyte HCM has left no stone unturned when it comes to compliance and ease of administration.

Can I choose which individual policies are approved?2019-11-13T10:50:50-06:00

No. As part of the ICHRA ruling, employers implementing ICHRA Administration cannot take part in or influence which health insurance their employees purchase.

So, why choose ICHRA over traditional group insurance?2019-11-13T10:48:56-06:00

It’s simple. ICHRA Administration puts cost control back in the employer’s hands and puts the choice of health coverage in the employee’s.

How do I get more information and possibly sign up?2019-09-10T09:36:28-05:00

We’re excited to connect with you.
Please contact us to learn more.

What is ICHRA?2019-09-12T11:07:03-05:00

ICHRA stands for Individual Coverage Health Reimbursement Arrangement and is a ruling brought down by the Departments of Treasury, Health and Human Services and Labor which allows for and provides guidance to employers wishing to reimburse money toward Individual Health Insurance premiums as well as specific Excepted Benefits. See our blog post for more information.

Who can offer an ICHRA?2019-09-12T11:08:03-05:00

All companies regardless of size can offer an ICHRA. Large employer or small, there are benefits to offering this great Plan option. Every benefits offering has its considerations with regard to compliance, so please read the rest of our great content for further clarification and if you have any questions, please reach out to us by clicking, Contact Us.

What can an ICHRA pay for?2019-09-12T11:09:21-05:00

Employers have a great deal of flexibility in what their money can be used for, and the dollar limits. For example, an employer can offer money toward individual premiums, specific out of pocket expenses, or both. There are compliance considerations to each so please visit our Blog page for details regarding compliance and plan design considerations.

What is required from the employer to offer an ICHRA?2019-09-12T11:09:54-05:00

An ICHRA is considered an ERISA Plan so there are specific areas of compliance that need to be addressed for this great option to be complaint. A few of these considerations are as follow:

  1. Plan documentation is required which includes a Master Plan Document, SBC and Summary Plan Description.
  2. Timely and specific communication with your employees is necessary.
  3. An ICHRA is subject to all ERISA non-discrimination requirements.

Please visit our Blog page for more information. Please contact us with any questions you may have.

A few additional considerations are as follows:

  1. You may offer different amounts of money to different classes of employees, but those amounts cannot vary past a certain amount and the classes available are outlined in the ICHRA ruling.
  2. You can offer money to an employee for medical expenses only, but those expenses must be in conjunction with a medical plan.
  3. An employer may allow the employees portion of their individual premium be deducted from wages on a pretax basis.

 

What is required from an employee to participate in ICHRA?2019-09-10T09:46:51-05:00

Employees who are within an eligible class may participate in the premium reimbursement provided that have enrolled in an individual or family policy. Employees who are eligible for an excepted benefit HRA may be reimbursed medical expenses incurred in conjunction with their health insurance, whether it’s individual coverage or not.

Does the ICHRA have participation minimums?2019-08-28T08:26:07-05:00

No, the ICHRA ruling does not outline a minimum number of enrolled members in order to be compliant.

Does the ICHRA have employer contribution requirements?2019-09-12T10:20:19-05:00

No, the ICHRA ruling does not stipulate a maximum or minimum amount required in order to be compliant. See our Blog page for more information with regard to any Plan design considerations.

I’m an Applicable Large Employer, can I offer an ICHRA?2019-09-10T09:56:29-05:00

Yes you can! In fact, offering an ICHRA means you have made an offer of Minimum Essential Coverage. In certain circumstances, offering an ICHRA with specific contribution level would even mean that you made an offer of Minimum Value. See our Blog page for more information with regard to ICHRA’s impact on employers with more than 50 employees.

If an ICHRA is affordable, does it constitute an offer of Minimum Value?2019-09-13T12:29:41-05:00

The short answer, it very well could. This is an exciting possibility for Large Employers struggling to offer the ACA equivalent of a Group Health Insurance Plan. Offering the ICHRA alone constitutes an offer of Minimum Essential Coverage, but in order to make it Affordable, an employer must consider a variety of factors. See our Blog page for more information with regard to making ICHRA affordable.

What are employee classes and are they required?2019-09-12T10:47:53-05:00

The ICHRA ruling provides guidance that employers can offer varying contribution amounts provided the amounts are divided by approved classes of employee. The approved classes are as follows:

  1. Full-Time Employees
  2. Part-Time Employees
  3. Seasonal Employees
  4. Employees covered by a collective bargaining agreement
  5. Employees who have not satisfied a waiting period for coverage
  6. Non-Resident aliens with no US-based income
  7. Employees whose primary site of employment is in the same rating area
  8. Salaried Employees
  9. Non-Salaried Employees
  10. Temporary Employees of a staffing firm
  11. A combination of two or more of the approved classes
Does the ICHRA prevent my employees enrolling through an exchange?2019-09-12T10:16:22-05:00

No, your employee may still enroll through an exchange. However, if they are enrolled through an exchange they will not be eligible for an Advanced Premium Tax Credit(APTC). If they are enrolled in an ICHRA as well as receiving an APTC, the APTC discount will be clawed back from them on their next tax return. See our Blog page for more information with regard to ICHRA’s impact on Advanced Premium Tax Credits.

Can I set up an ICHRA prior to Jauary 1st, 2020?2019-09-10T09:25:44-05:00

Yes, you can setup an ICHRA and hold your employee meetings prior to January 1st, 2020, but the Plan itself cannot distribute any money for expenses before January 1st, 2020.

If I hire someone mid-year, do they have to wait until January to enroll?2019-09-10T15:12:27-05:00

No, the ICHRA ruling provided guidance that being eligible for this Plan established a Special Enrollment Period thus allowing your new employee to enroll mid-year. See our Blog page for more information with regard to ICHRA’s impact on mid-year enrollments.