ERISA Safe Harbor

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ERISA Safe Harbor – Individual health plans are not subject to ERISA so long as the choice of plans is completely voluntary.

In order to avoid the individual health plans being subject to ERISA, the employer must not select or endorse any particular insurance carrier or coverage options, cannot receive any financial incentive, and must notify participants annually that the individual health insurance is not subject to ERISA. Individuals must be permitted to enroll in any qualifying individual health coverage, on or off-Exchange.

While coverage purchased via a private exchange could also be integrated with an ICHRA, guidance hasn’t clarified whether a platform providing only a subset of all individual health coverage options would meet ERISA safe harbor requirements (even if individuals still have option to find other individual health coverage on their own).

NOTE: The ICHRA would generally be subject to ERISA, requiring plan documentation (e.g. SPD and SBC) and Form 5500 filings as applicable.