What is an ICHRA?
Employers have the freedom to customize their own
ICHRA benefit package, but there are a few things to
know before you get started.
The ICHRA or Individual Coverage Health Reimbursement Arrangement is an alternative employee benefit strategy that gives the employee the freedom to choose their own benefit package with a defined contribution amount from their employer. Employees can use the money from the employer to help pay premiums from an Individual Health Insurance policy or medical expenses like Copays, Prescription Drugs, and more. (See IRS 502).
A few Things to Know:
If your BenefitCredits ICHRA plan is considered “Affordable” (only for groups over 50 employees) then employees are NOT eligible for premium tax credits. When a plan is considered “Not Affordable” then employees can choose between tax credits or the ICHRA.
Enrollment Periods
The only way you can enroll outside of December’s Open Enrollment Period is by a qualifying event such as a Loss of Coverage, Marriage, Divorce, Birth of a Child, or Move from one service area to another. However, BenefitCredits ICHRA will automatically activate a Special Enrollment Period and give the employee 60 days to enroll and purchase Individual health insurance coverage.
Reimbursement Options
Premium reimbursement only
Premium reimbursement with Section 125 Plan
Premium reimbursement with Section 125 Plan and Medical Expenses.
Eligible Employee Classifications:
Full Time Employees
Part Time Employees
Seasonal Employees
Employees covered by a collective bargaining agreement
Employees who have not satisfied a waiting period for coverage
Non-resident aliens with no US based income
Employees whose primary site of employment is in the same rating area
Salaried Employees
Non Salaried Employees
Temporary Employees of a staffing firm
A combination of two or more of the above classes
Setting Up An ICHRA with Benefit Credits:
Step 1: Determine which employees are eligible for your Benefit Credits ICHRA.
Step 2: Define Cobtribution Amounts to give employees.
Step 3: Pick a Reimbursement Option.
Step 4: Decide on a date to start.
Step 5: Create a Legal Plan Document and Summary Plan Document.
Step 6: Employeee Communication about Benefit Credits ICHRA.
Step 7: Employees can start shopping online or over the phone.
Step 9: Use our ongoing Benefit Administration.
And that’s It!