Most employers and brokers are familiar with the big compliance items tied to an Individual Coverage HRA (ICHRA): plan documents, affordability, employee notices, and ACA reporting. But there’s a less‑talked‑about ICHRA reporting requirement that’s getting more attention across the industry: Section 111 Medicare Secondary Payer (MSP) reporting.
This isn’t meant to be alarmist or overly technical. Think of this as a friendly heads‑up.
What is Section 111 Reporting?
Section 111 reporting is a federal requirement overseen by the Centers for Medicare & Medicaid Services (CMS). Its purpose is simple: to help Medicare understand when another health arrangement exists that could pay for certain medical expenses.
Traditionally, Section 111 reporting has been associated with self‑funded group health plans and large carriers. That history is part of why many people assume it doesn’t apply to ICHRA.
But CMS guidance makes it clear that Health Reimbursement Arrangements (HRAs), including ICHRAs, fall within the scope of Medicare Secondary Payer rules when certain conditions are met.
Why This ICHRA Reporting Requirement Matters
Not all ICHRA designs are the same:
- Some ICHRAs reimburse premiums only
- Others reimburse premiums and qualified medical expenses under IRS §213(d)
When an ICHRA allows reimbursement of medical expenses and a Medicare‑enrolled employee is participating, CMS views that arrangement differently than a premium‑only design.
In those cases, Section 111 reporting may apply, depending on how the benefit is structured and the amount available to that Medicare‑eligible individual.
This is where confusion often starts, and where things can be missed.
Who is Responsible for Section 111 Reporting?
In most cases, the ICHRA administrator is responsible for handling Section 111 reporting.
That’s important, because:
- Many ICHRAs today are self‑administered by employers
- Others are broker‑led or managed using basic tools
- Some platforms focus on affordability and enrollment, but not ongoing federal reporting
Section 111 reporting isn’t automatic. Someone must:
- Determine whether reporting applies
- Register with CMS when required
- Track Medicare‑eligible participants
- Submit quarterly files accurately and on time
If no one is doing this intentionally, there’s a good chance it’s not being done at all.
Common Misconceptions we Still See
We hear these statements a lot:
- “We’re a small employer, so this doesn’t apply.”
- “ICHRA doesn’t pay claims, so there’s no reporting.”
- “Our broker would tell us if this was required.”
- “This only applies to traditional self‑funded plans.”
The reality is more nuanced.
Employer size affects who pays first under Medicare rules, but it does not eliminate the reporting requirement itself. And while ICHRA doesn’t function like a traditional medical plan, CMS has made it clear that HRAs are still part of the MSP framework.
Why Administration Matters More Than Ever?
This is one of those compliance areas that doesn’t usually surface until there’s a problem.
At Flyte, Section 111 reporting is built into our ICHRA administration when it applies. That means:
- Evaluating plan design up front
- Identifying Medicare‑eligible participants
- Determining whether reporting thresholds are met
- Handling registration, submissions, and ongoing reporting
For employers and brokers, that removes a layer of risk that often goes unaddressed.
A Simple Question Worth Asking
If you already have an ICHRA in place, or you’re advising clients who do, here’s the question we encourage you to ask:
“Is Section 111 reporting required for this ICHRA, and if so, who is actually doing it?”
If the answer isn’t clear, it’s worth taking a closer look.
ICHRA Reporting Requirements Made Easy
ICHRA continues to be one of the most flexible and effective benefit strategies available today. But as the market matures, so do the compliance expectations around it.
Understanding Section 111 reporting and making sure it’s handled correctly is part of running an ICHRA the right way.
If you’d like help reviewing an existing ICHRA or want to understand how this applies to a new program, contact us. Our team is always happy to talk through it.
Employees choose and purchase their own ACA-compliant individual health insurance plan or be enrolled in Medicare, including applicable Medicare parts. After enrolling, they must submit an official invoice or billing statement from their insurance provider as proof of premium. If the employer allows reimbursement for additional medical expenses, employees must submit detailed documentation (such as an Explanation of Benefits (EOB) or itemized receipts) to be reimbursed for eligible expenses.
Employers do not pay for insurance directly. Instead, they reimburse employees for their premiums and qualifying expenses after proof of payment is provided. This allows employers to manage costs without dealing with insurance carriers directly.
ICHRA can be offered by businesses of any size and allows different reimbursement amounts for different employee classes.
QSEHRA is only for employers with fewer than 50 employees and must offer the same reimbursement amount to all employees (with some adjustments for age and family size). Additionally, QSEHRA has annual contribution limits, whereas ICHRA does not.
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.
Yes, when properly designed and administered, ICHRA complies with IRS, ACA, and ERISA regulations. Using a third-party administrator ensures compliance and simplifies documentation requirements.
Third-party administration helps employers stay compliant, manage reimbursements, and simplify the employee experience. Admins handle documentation, reporting, claims processing and remittance of reimbursements.
ICHRA administration refers to the management of reimbursements, compliance, and employee communications related to an ICHRA plan. Many employers use a third-party administrator to handle these functions for efficiency and compliance.
