When you make the official decision to move forward with adopting an ICHRA for your business, it doesn’t mean you still don’t have questions. Whether this is your first time developing an ICHRA offering or not, the goal posts are always shifting and leaving business owners with ongoing questions. In fact, most businesses, still concerned about ICHRA compliance in 2021, have many questions. Today, we’ll ask those probing inquiries and offer the cut and dry answers to help you continue forward with the ICHRA setup for your company.
1. ICHRA Compliance Questions During Setup
Setting up your ICHRA ecosystem will take some doing. While you crunch your numbers to determine budgets and assess which roles still need to be filled, you’ll have some questions about compliance. Here’s what is most often asked about compliance during the setup phase.
Are there Contribution Limits?
When you’re configuring your budgets for reimbursements, you may be wondering about contribution limits. ICHRAs are not subject to any contribution limits when it comes to rates. You can develop your payout platform according to your company budget and be as generous as you choose.
Can One of My Employees Be an Administrator?
Companies embarking on the ICHRA journey almost always have questions about administrator duties. Can you appoint an internal member of your staff to be a designated administrator of the ICHRA? You absolutely can select an administrator, although it may be wiser to outsource administration and setup to a third-party. Compliance can be tricky without someone who knows the nuances and understands the changes. Partnering with a third-party, like W3LL, can also help provide an added layer of privacy protection for your employees. Bringing in an expert can allow you to leverage analytics about participation, track reimbursements, and submission requirements.
Does My Company Have to Establish a Special Fund?
Reimbursement arrangements like the ICHRA or the QSEHRA are designed to payout for specific expenses as the employees submit them. You might be wondering if you’re going to be required to have a dedicated allotment of funds, or a separate financing account, just for these expenses. While it might be easier to track and manage compliance and funding with a separate account, you’re not required to use one.
2. ICHRA Compliance Questions Regarding Participation
Once your ICHRA is set up and guidelines are in place, you’re ready to launch the platform officially to your staff. But you might have questions at the employee level, especially in regards to maintaining your ICHRA compliance. We’ll discuss three of the most common concerns relating to employee-level engagements and participation.
Are There Participation Limits?
Whether you’re offering an ICHRA exclusively or in tandem with a group plan, you may be wondering about the participation limits and compliance requirements. For ICHRA participants, there are no limits or minimum adoptions required. This is a huge perk of the ICHRA model since traditional group plans typically require a 70% or so participation rate.
What Happens if My Employees Don’t Use All of the Allowances?
When you originally set up your ICHRA budget, you probably worry about not having enough funds to cover your employees’ reimbursements. But on the flip side of that concern, what happens to allocated funds that don’t get reimbursed? If your employees don’t use all of the funds you’ve set aside or your employees don’t submit enough to recoup the full amounts, as the employer, you keep those remaining funds.
Can an Employer Customize the ICHRA to Different Employees?
One of the flexibilities most attractive about the ICHRA platform is the ability for employers to create classes of staff and customize the reimbursement guidelines. You can offer a group plan to full-time employees and leverage the ICHRA for part-time employees, for example. And the ICHRA can be extended to seasonal help, temporary staff, or hourly employees as well. As long as your ICHRA is being offered fairly and equally, you’re free to carve out the customization your company needs.
3. ICHRA Compliance Questions for Maintenance
Once the ICHRA ball is rolling and your plan is implemented, there will be changes and nuances that change along the way. Employees may come and go, and your ICHRA should be ready to accommodate those maintenance changes in a way that’s consistent with compliance requirements. And with those changes come ongoing questions.
What Happens If an Employee Loses Coverage Mid-Year?
Since the ICHRA system requires your employees to obtain and maintain health insurance coverage on their own as a prerequisite for reimbursement eligibility, losing that coverage means losing ICHRA privileges. Employees dropping or losing coverage for any reason disqualifies them from participation in your ICHRA plan and claims.
What If ICHRA Regulations Change Mid-Year?
The federal guidelines for healthcare are continuously changing. Your business might be compliant during the setup and initiation process, but if you’re not up-to-date on nuances and regulations, you might find yourself out of compliance. Because policies continue to evolve ongoing, it’s imperative you have an administrator, like W3LL, stay in tune with updates that can be easily implemented to avoid penalties and issues.
What Are the Requirements for Record Keeping?
The IRS typically requires small businesses to keep track of records for a period of seven years. This can be especially tedious when you’re talking about employees’ physical receipts for services eligible for reimbursement. Having a third-party administrator at the helm of your ICHRA can ensure your digital records are collected, organized, and maintained properly.
While these discussions tend to represent some of the most common ICHRA questions, there are always others, especially if this is a first-time setup for your company. For reliable answers to your other concerns about ICHRA compliance, contact W3LL.
We are uniquely positioned, as an ICHRA expert, to help businesses large and small take the necessary steps to set up and maintain ICHRA benefits. We can help you get started and roll out the plan to your employees. Our system provides analytics to help you stay in tune with your ongoing reimbursement budgets and employee participation, as well. And as a third-party administrator partner, we can help put your mind at ease about compliance.