What an ICHRA brings with it on the compliance side.
An individual coverage HRA moves the premium decision to employees, but it does not remove the employer’s compliance duties. The plan is still an employer-sponsored health plan, and several of the same notices and filings can still apply.
Three things to settle first.
Each has its own guide with the rules behind it.
Notices
An ICHRA requires a written notice to eligible employees ahead of the plan year.
Affordability
The offer is tested against the affordability rule each year.
Plan Document
An ICHRA needs a written plan document like other employer health plans.
Where an ICHRA meets the usual compliance services.
Reporting
Large employers report ICHRA offers on Form 1095-C. See the reporting rules.
Continuation and Fees
COBRA and the PCORI fee can apply. See the notice rules.
Privacy
An ICHRA is a group health plan with HIPAA duties. See what a plan owes participants.
Treating the ICHRA like any other health plan on the calendar.
Employers sometimes assume that moving to an allowance model means the compliance calendar clears. It does not, though the mix changes. The plan still needs a written document, employees still need timely notices and the employer still needs a way to track who was offered what, month by month.
Setting this up at the beginning is far easier than correcting it later. We suggest building the calendar for the ICHRA the same way you would for a group plan, with a named owner for each date. Because the rules for ICHRAs and the related reporting are technical and can change, confirm the details with your advisor and counsel.
The questions employers ask.
Five questions to settle first.
Does COBRA apply to an ICHRA?
An ICHRA is a group health plan, so COBRA can apply when the employer is large enough to be covered. We check your situation.
Do we report an ICHRA on ACA forms?
Large employers report ICHRA offers on Form 1095-C using the offer codes for it. Smaller employers may have no ACA filing.
Does the PCORI fee apply?
It can. An HRA can be a plan that owes the fee, counted by participants. We check each one.
Is an ICHRA subject to HIPAA?
As a group health plan, an ICHRA has HIPAA duties, and a plan sponsor that handles health information needs safeguards.
Can CFH set up the compliance side?
Yes. We can arrange the related services together. Tell us how the ICHRA is structured and we will map what applies.
Who tracks employee premiums and proof of coverage?
The plan typically requires employees to provide proof of individual coverage, and someone on the employer side or the administrator needs to collect and keep it. Decide who before the plan year starts.
Can the compliance work be outsourced?
Much of it can be handled by an administrator or compliance provider, though the employer stays responsible. We can help you choose who does what.
Ready? Upload your renewal, or talk it through with someone first. No cost, no obligation.
General information about compliance services, not legal or tax advice. Plan-specific questions belong with your counsel, and we will bring them in.
Related guides.
Plan Compliance Basics Bundle
ERISA, HIPAA and FMLA together.
Continuation and Reporting Bundle
COBRA, ACA, PCORI and Medicare reporting together.
Compliance Service Bundles for Employers
All the bundles in one place.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
Individual Coverage HRAs (26 CFR 54.9802-4)
The rule that sets the ICHRA requirements.
ACA Employer Reporting (26 U.S.C. 6056)
The information reporting rules for large employers.
Fee on Self-Insured Health Plans (26 U.S.C. 4376)
The PCORI fee plan sponsors pay and how lives are counted.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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