Compliance Overview

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Compliance and administration issues

Compliance overview

ICHRAs are subject to various compliance requirements, principally regulated by the IRS. Failure to comply with relevant rules could mean employers could be required to treat benefits provided to employees through the ICHRA as taxable income to employees.

An ICHRA must meet the following requirements:

Participants must be enrolled in individual health coverage or Medicare

Participants must provide annual and ongoing substantiation of enrollment in individual health coverage or Medicare

Eligibility and reimbursement levels must comply with rules for specified “classes” of employees

Employees offered the ICHRA cannot also be offered a traditional group medical plan

Participants must be able to opt-out of and waive any future reimbursements

An initial and annual notice must be provided to eligible individuals