How do ICHRA funds work?

An ICHRA operates as a reimbursement arrangement, not a pre-funded account. This is an important distinction from benefits like Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs).

Reimbursement, not pre-funding

When an employer establishes an ICHRA, they set a monthly allowance amount for each employee or employee class. However, this money is not deposited into an account for the employee to draw from. Instead, the funds remain with the employer until the employee submits a qualified expense for reimbursement and the claim is approved.

How the process works

1. The employee pays their individual health insurance premium (or other qualified expense, if allowed by the plan)
2. The employee submits a reimbursement request with required documentation
3. The employer (or their ICHRA administrator - i.e., BerniePortal) reviews and approves the claim
4. The employee receives the reimbursement, up to their available allowance

What this means for employees

Employees must take action to receive their ICHRA benefit. Simply being enrolled in qualifying coverage does not automatically trigger reimbursement—employees need to submit claims. If an employee never submits a reimbursement request, the funds remain with the employer.

This is why clear communication about the submission process is important: employees who don't understand how to submit claims may miss out on benefits they're entitled to.