Compliance and administration issues
If the ICHRA is not being offered to all employees, it must be offered to all employees within a specified class, generally on the same terms.
Employees working in the same geographic location
Employees covered by a collective bargaining agreement
Employees who have not satisfied a waiting period
non-resident aliens with no u.s. based income
Temporary employees of staffing firms
Classes can be combined and can also be defined separately for each entity within a controlled group or affiliated service group.
Offer Must be Consistent within Class
While the general rule is that the ICHRA must be offered on the same terms to all employees within a specified class, there is a bit of flexibility to vary employer contributions. Individual health coverage premiums vary by age, so it may make sense for employers to make a larger amount of reimbursement available to older employees. In addition, the employer may be willing to make a larger amount available to those employees who choose to also enroll their spouse and dependents.
- Employer contributions can vary based on age (maximum of 3:1 comparing the contribution for the oldest vs the youngest age categories).
- Employer contributions can vary based on number of dependents eligible for reimbursement.
Employees offered the ICHRA cannot also be offered a traditional group medical plan.
Those employees offered an ICHRA cannot also be offered a traditional medical plan by the same employer. Employees cannot be given a choice between the traditional group medical plan and the ICHRA. If the ICHRA is offered within a class (as specified above), none of the employees within that class may also be eligible for the employer’s traditional group medical plan, if any.
Minimum Class Size
If an employer offers a traditional medical plan to some employees and an ICHRA to other employees, it may be necessary to consider minimum class size rules.
- A minimum class size rule applies when the employer offers a traditional group medical plan to some employees and an ICHRA to other employees in the following classes: full-time, part-time, salaried, non-salaried, or geographic location (if the location is smaller than a state).