What is ICHRA Design Rules?
1.3k views | Last modified 11/9/2024 7:45:41 AM EST

Effective from January 1, 2020, the Individual Coverage Health Reimbursement Arrangements (ICHRA) offers employers an effective alternative to the traditional way of offering health insurance coverage to their employees.

Employers who are looking for ways to focus their time on what to do best to provide better assistance to their customers--and not on managing employees' complex group plans. ICHRA would be the best choice!

Here is an overview of the ICHRA’s new design rules

1. Businesses of any size are eligible to offer an ICHRA to their employees.
2. Employees are eligible to participate in ICHRA and receive reimbursements from employers only if they maintain a qualified individual health plan. 
3. Employees of different classes (say geographic location, seasonal, part-time, full-time, abroad) can be offered different levels of benefits from their Employer. 
4. With ICHRA, there are no maximum or minimum limits for monthly reimbursement amounts. 
5. Employers have the flexibility to offer an ICHRA to the employee at any time throughout the year. 
6. Employers can't offer an ICHRA to an employee covered under their group health plan. However, they can offer Excepted Benefit HRAs to employees.
7. If ICHRA is considered ‘unaffordable’ under ACA, employees can choose between using Premium Tax Credits or the ICHRA. If it is considered ‘affordable,’ then the employee cannot opt-out and receive a premium tax credit.
8. Once a year, the employees must be given a choice to ‘opt-out’ of receiving reimbursements through an ICHRA.
9. ICHRA will not reimburse medical care costs like Copay, deductible, short-term, limited-duration insurance (STLDI), and dental- or vision-specific costs.
10. If the employee is outside of open enrollment: Employees will have 60 days to purchase a health plan once the ICHRA becomes active, as it triggers a special enrollment period. This allows employees to find an individual health plan that meets MEC outside of open enrollment.

If you offered an ICHRA plan to your eligible employees for the 2024 tax year and do not have an idea how to generate ICHRA codes on Form 1095 to report the coverage information with the IRS, get in touch with ACAwise. We help you to generate the ICHRA codes and file your ACA Forms with the IRS, State and distribute the 1095 copies to your employees on-time.