Considering just how popular Individual Health Coverage Reimbursement Arrangements (ICHRAs) are right now, businesses are also asking a lot of ICHRA-related questions. Businesses are recognizing the many benefits, including flexibility and cost control, but many are still sailing through uncharted territory. And when it comes to questions, there are certainly a lot of inquiries regarding compliance specifically.
As a knowledgeable partner for many companies exploring their ICHRA opportunities, here at W3ll, we often help business owners and managers navigate the compliance waters. Today, we’ll share three of the most common types of ICHRA questions and provide the answers to help ensure your ICHRA is successful.
1. ICHRA Terms & Setup Questions
There are requirements and compliance mandates for any business looking to set up an ICHRA. And with the varying types of industries exploring their next steps during this process, understanding the terms is paramount. The following inquiries are three of the most common and frequently occurring questions.
Where Should a Business Start with ICHRA Setup?
This could be one of the more common ICHRA questions of all. You know you want to move forward with setting up an ICHRA for your employees, but compliance requirements exist even during these early inception phases. Businesses will need to select employee eligibility groups and allowance amounts. There will need to be an itemized launch date as well as legal plan documentation. Additionally, companies should outline employee-facing communications and ICHRA support.
What Qualifies as Individual Coverage?
Any health plan your employee purchases on the exchange will qualify as compliant individual coverage. So, for some, these plans can be through state-based exchanges or the Healthcare.gov Marketplace. Any staff member with Medicare will also be compliant to participate in the ICHRA. For those employees who may have coverage through an exchange-based family plan, their coverage is also compliant. Alternatively, any group plan that involves a membership or waiver for pre-existing conditions is not ICHRA compliant.
What Is a Qualified Health Plan?
When setting up your ICHRA, you’ll want to understand the minimum requirements for coverage. There are two IRS provisions outlining the rules of the road when it comes to compliant qualified health plans. For example, there can be no lifetime limits applied for coverage. And there is a roster of essential health benefits that all insurers must cover, free of charge. These parameters only apply to those plans purchased through an exchange, however. Should your employees enroll in a direct purchase plan from a health insurance company, they may not be ICHRA eligible if these minimum essential coverage benefits are not met.
2. ICHRA Disqualifying Questions
Knowing what to do is usually the subject of common ICHRA questions. But oftentimes, we also hear several inquiries about what not to do. In terms of compliance, here are some questions and answers centered around disqualifying scenarios.
Can Businesses Offer Group Plans & ICHRA Reimbursements?
A company can offer both group health insurance and ICHRA plans under two conditions. Class size minimums must be met, and both coverage options cannot be provided to the same group of employees. In other words, some employees may enroll in a company-sponsored group plan while others take advantage of the company ICHRA. But no employee can leverage both types of plans.
Can Terminated Employees Take ICHRA Benefits with Them?
If an employee leaves the company, either voluntarily or due to termination, the ICHRA benefits no longer apply. Because an ICHRA is owned and managed by the company, the benefits offered will stay with the company. However, should any staff member retire, ICHRA reimbursements can still apply, based on that employee’s designated class.
Can an Employee Accept Federal Tax Credits and ICHRA Reimbursements?
The premium tax credits offered through the Marketplace translate to monthly premium subsidies based on eligibility requirements. Anyone accepting these discounts cannot also participate in a company ICHRA. Employees will need to choose between one or the other to remain compliant.
3. ICHRA Support Questions
Once an ICHRA is active, there can be new questions that arise regarding maintenance and support of the program. New situations present, and companies often need direction to ensure continued compliance. Here are a few of those types of questions answered.
What Kind of Expenses Can a Company Reimburse?
The employer will determine the ICHRA plan design, which will outline the various expenses employees can submit for reimbursement. Some of these expenses can include traditional healthcare costs like scans, prescriptions, and out-of-pocket costs for routine physician visits. But they can also include chiropractic care, acupuncture, and substance abuse treatment programs. And unlike a traditional HRA, the ICHRA authorizes businesses to reimburse monthly health insurance premiums, as well.
How Should Companies Enact Reimbursements?
Another advantage companies enjoy with the ICHRA solution is the flexibility surrounding payments. Employees will need to submit their receipts of healthcare-related services for approval. Once approved, the company can authorize reimbursements. And those channels can be weekly, monthly, or immediate. Some businesses choose to fold reimbursements in with regular payroll cycles or general expense reporting procedures. As long as the methods are outlined in the ICHRA plan with clear communication to the employees, these reimbursement efforts are compliant.
Should Companies Use Third-Party Administrators?
While businesses are entirely capable of setting up and managing their own ICHRAs, many realize there are even more advantages to partnering with third-party administrators. It is not a requirement to do so. However, compliance requirement monitoring and participation management might be better handled with TPA professionals. TPAs can also collect and offer critical data about costs, reimbursements, and enrollment tracking.
When you move forward with an ICHRA, you’ll likely have ICHRA questions. And to make sure your employees understand the countless benefits of such a platform, you want to make sure your program remains compliant from setup through to execution. If you have additional ICHRA questions, let the professionals at W3ll help provide the answers.
And if your company is ready to explore the benefits of partnering with an ICHRA third-party administrator, W3ll can help there, too. Let us manage all the details, bring the tools needed for a successful ICHRA program, and handle every compliance requirement you face.