Which employers are eligible to offer an ICHRA?

Which employers are eligible to offer an ICHRA?

Which employers are eligible to offer an ICHRA?

One of the most accessible aspects of an ICHRA is that virtually any employer can offer one. There are no restrictions based on employer size, industry, or structure.

Eligible employers include:

  • Businesses of any size, from a single employee to thousands
  • For-profit and non-profit organizations
  • Government entities
  • Religious organizations
  • Self-employed individuals with at least one W-2 employee (sole proprietors with no employees are not eligible)

Other key eligibility points:

No prior group plan required: Employers do not need to have previously offered a traditional group health plan to establish an ICHRA. It can be a first-time health benefit offering.

Can be offered alongside a group plan: Employers can offer an ICHRA to certain employee classes while offering a traditional group health plan to others. However, employers cannot offer both an ICHRA and a traditional group plan to the same class of employees—it must be one or the other for each defined class.

No minimum contribution required: There is no regulatory floor for how much an employer must contribute, giving employers flexibility to design a benefit that fits their budget.

    • Related Articles

    • How does an ICHRA interact with ACA requirements and the employer mandate?

      How does an ICHRA interact with ACA requirements and the employer mandate? ICHRAs were designed to work within the Affordable Care Act (ACA) framework. When structured correctly, an ICHRA can satisfy the ACA's employer mandate requirements for ...

    • Can an employee have both an ICHRA and a Health Savings Account (HSA)?

      Can an employee have both an ICHRA and a Health Savings Account (HSA)? It depends on how the ICHRA is structured. A standard ICHRA will disqualify an employee from contributing to an HSA, but employers can design an HSA-compatible ICHRA that allows ...

    • What is an ICHRA?

      ICHRA stands for Individual Coverage Health Reimbursement Arrangement. It is an employer-funded health benefit that allows employers to reimburse employees tax-free for individual health insurance premiums and, in some cases, other qualified medical ...

    • Are ICHRA plans subject to COBRA?

      Are ICHRA plans subject to COBRA? Yes. ICHRAs are considered group health plans under ERISA (Employee Retirement Income Security Act) and are therefore subject to COBRA (Consolidated Omnibus Budget Reconciliation Act) requirements for employers with ...

    • Can an ICHRA reimburse for dependent coverage?

      Can an ICHRA reimburse for dependent coverage? Yes. Employers can design their ICHRA to reimburse employees for dependent coverage, but this is an employer choice—not a requirement. The plan documents must specify whether dependents are included and ...