Organizations looking for an ICHRA plan document template should understand that the Individual Coverage Health Reimbursement Arrangement regulations change annually. Managing these regulatory changes while ensuring compliance can be challenging. The Take Command ICHRA platform addresses this complexity through built-in, automatic updates to ensure compliance and provides all necessary ICHRA plan documents for both employers and employees.
Why you need an ICHRA plan document
Health Reimbursement Arrangements, including ICHRAs, are classified as group health plans under federal regulations, and are subject to ERISA requirements. ERISA Section 402 mandates that every employee benefit has a written HRA plan document template that establishes and governs the plan. Additionally, ERISA regulations require organizations to make this document accessible to both employees and their beneficiaries.
Plan sponsors, usually the employer, are responsible for developing a summary plan document (SPD) that provides participants with a comprehensive yet condensed overview of the plan. While the primary ICHRA plan document is written using legal terminology, the SPD must be written in a way that is easily understandable for the average plan participant.
ERISA § 2520.102-31 provides comprehensive guidance for creating the SPD by outlining the required components. These elements encompass participant benefits, rights, and obligations that participants have under the plan. Following this guidance ensures employers develop an SPD that effectively communicates the key information to plan participants in a clear and easy to understand format.
While there are no specific penalties outlined for not meeting these requirements, employers should note that failure to produce the sample HRA plan document when requested by ICHRA participants can result in fines imposed by the IRS. Maintaining compliance through readily available documentation remains critical for avoiding potential penalties.
Additionally, employers face potential fines for failing to provide the SPD to participants within 120 days of ICHRA establishment. For participants joining existing ICHRAs, employers have a 90-day window to deliver the SPD.
How to set up an ICHRA
- Pick a start date.
- Set a cancellation date for your group policy (if applicable). This required only for organizations currently offering group health insurance.
- Define eligibility criteria. ICHRA's flexibility allows employee classification into eleven distinct categories for benefit determination.
- Determine a budget and set allowances. There’s no minimum or maximum limits on contributions!
- Establish legal plan documents. (That’s what we’re talking about today!)
- Communicate your new benefit to employees.
- Provide resources for employees to purchase individual health insurance.
For more details on this, check out our blog post on How to Set up an ICHRA.
As the only ICHRA administrator offering health insurance on the individual market, Take Command provides the best on- and off-market options tailored to employees' specific needs, budget, preferred healthcare providers, and prescription requirements.
ICHRA Plan Document Template Components for 2025
Your ICHRA plan document template must incorporate three legal documents. Here's what must be included in your 2025 free benefit summary template:
Legal agreement requirements
The legal agreement formally establishes the employers ICHRA and must include:
- Named fiduciaries and plan administrators and their responsibilities
- Eligibility requirements for the ICHRA
- Effective dates of participation
- Description of benefits provided and excluded
- How the ICHRA is funded and how it makes payments
- Claims procedures
- HIPAA privacy officers and rules relating to the use of protected health information (PHI)
- Information on federal mandates
- The procedure for amending the plan
- The procedure for plan termination
Responsibilities of plan administrators and fiduciaries
The ICHRA plan documents must clearly identify fiduciaries responsible for overseeing and managing ICHRA administration. These fiduciaries ensure smooth, effective plan operation through their expertise and accountability in making decisions that align with the best interests of the plan participants.
Once these individuals are designated in the plan documents, they willingly take on the responsibility of fiduciary duty for ICHRA participants. This requires them to prioritize participant interests and ensure that only reasonable medical expenses are covered.
The HRA plan document template must also designate a plan administrator with specific powers and responsibilities, ensuring efficient ICHRA administration. Plan administrator authorities include:
- Interpreting the plan
- Drafting ICHRA participant forms
- Communicating to employees about ICHRA
- Signing documents for plan administration
- Maintaining relevant plan information
- Appointing others to assist in plan administration support
Note that, in most cases, the organization serves as both fiduciary and plan administrator.
ICHRA eligibility criteria
The sample HRA plan document must clearly delineate eligibility requirements.
In order to participate in the ICHRA, it is mandatory for all participants to have individual health insurance. However, employers have the flexibility to determine eligibility based on the eleven employee classes.
Eligible employees may include their spouses and dependents in their ICHRA coverage, extending benefit participation opportunities.
Participation start dates
The plan document must specify exact dates when eligible employees can begin ICHRA participation, including employer-imposed waiting periods.
Employers have the flexibility to establish employees participation start dates, allowing them to choose an effective date that aligns with their start date or up to 90 days post-hire.
Description of benefits provided (and excluded benefits)
The QSEHRA plan document principles apply here: documents must explicitly specify reimbursable expenses through the ICHRA and identify non-eligible expenses.
ICHRAs may cover expenses classified as "medical care" under IRS Section 213(d). However, employers may specify exclusions through detailed listing in plan documents, allowing employers to tailor the coverage to meet the specific needs of their employees.
This section should also detail about the monthly allowance amounts available to employees based on the 11 employer-established classifications.
ICHRA funding and payment protocols
The plan document must outline how payments are made to the insurance carriers and how the reimbursements will work for the ICHRA.
ICHRA funding and payment processes vary based on organizational administration choices. While ICHRA pre-funding is not mandatory, certain third-party administrators (TPAs) may require pre-funding as part of their services.
Organizations retain funds until the employee's expense has been verified and approved for reimbursement, ensuring efficient processing.
Document claims procedures
The plan document must establish and adhere to equitable procedures regarding the claims process. In the case of an ICHRA, "claims" refers participant-submitted reimbursement requests.
ERISA compliance requires ICHRA plan documents to establish protocols governing plan procedures, including:
- Reimbursement claim filing procedures
- Administrator notification processes for claim-related decisions
- Denied claim appeal handling procedures
While employers have freedom in designing these procedures, ERISA offers some specific guidelines.
HIPAA and PHI compliance information
ICHRAs provided to organizations with fewer than 50 full-time employees are exempt from most HIPAA regulations.
However, these ICHRAs remain subject to HIPAA Privacy Rules, which dictate the circumstances under which the plan can disclose protected health information (PHI) to the company.
Compliance requires plan documents to designate HIPAA privacy officers (typically the plan administrator), who access participant PHI while ensuring regulatory compliance.
Plan documents must include PHI usage and disclosure provisions in accordance with the HIPAA Privacy Rules, plus PHI protection measures aligned with HIPAA Security Rules.
Organizations with 50+ employees must ensure compliance with all HIPAA sections.
Federal mandate information
The ICHRA plan document must clearly articulate with federal mandates including the Family and Medical Leave Act (FMLA) and the Uniformed Services Employment and Reemployment Rights Act (USERRA). Organizational size primarily determines ICHRA alignments with these mandates.
Plan amendment procedures
The free benefit summary template should provide clear guidance for amendments to the plan, identifying authorized change-makers, and establishing streamlined processes for communicating any important modifications to employees.
ERISA requires prompt participant notification of ICHRA plan amendments no later than 210 days after the end of the plan year in which the amendment was implemented. However, amendments significantly reducing ICHRA benefits or services require 60-day participant notification.
Plan termination procedures
Plan documents should provide comprehensive information on the rights of both the business and the participants in the event of ICHRA termination. It is crucial to outline how the plan assets will be managed and handled during the termination process.
Plan summary
Employees must receive a written Plan Summary providing a condensed, user-friendly explanation of ICHRA benefits and how it works. This document should minimize legal terminology while including information on different classes of benefits and a helpful link to the Take Command platform for employees requiring assistance selecting affordable plans based on individual needs, healthcare providers, and prescriptions. Providing employees with resources up front will ease the transition, especially if they are shopping on the individual market for the first time.
ICHRA employee notice
Since Individual Coverage HRAs require employees to purchase an ICHRA qualified plan for themselves (rather than selecting employer-sponsored group health plan tiers), the employee notice guides employees in the process of purchasing health insurance from the marketplace. ICHRAs must provide a 90-day notice to eligible employees regarding ICHRA operations, premium tax credit interactions, and the qualifying 60-day Special Enrollment Period (SEP) that is activated when an employee gains access to ICHRA.
The ICHRA employee notice will need to include the following information:
- Permitted benefit amount per employee & ICHRA start date for employee
- An opt-out provision for the employee
- An explanation of potentially utilizing a premium tax credit if the employee opts out of ICHRA and the ICHRA allowance is deemed unaffordable
- An explanation of what happens with the premium tax credit if the employee accepts to participate in ICHRA
- The employee will need to inform the health insurance Exchange of ICHRA if they apply for APTC
- A statement that ICHRA is not QSEHRA
- Contact Information for employees to contact for help regarding their ICHRA
- Statement that new access to ICHRA qualifies employees and dependents to a Special Enrollment Period (SEP) to purchase insurance from the Exchange for 60 days
Looking for expert assistance with your ICHRA plan document template?
If navigating these requirements seems complex, Take Command's comprehensive platform can help. Our step-by-step ICHRA administration guide demonstrates how Take Command manages the administrative burden and documentation requirements on your behalf.
Our services include:
- Complete management of accounting and legal requirements
- Comprehensive employee onboarding for each participant
- Streamlined tax reporting and compliance
With Take Command, you'll eliminate receipt management concerns and remove the complexities of health plan administration from your responsibilities.
Additional resources →
- Click here for QSEHRA plan templates
- Learn about ICHRA Classes
- Learn about ICHRA Requirements
- Learn about ICHRA Regulations
- Learn about ICHRA Plan FAQs
- Learn about our ICHRA Administration Platform
If you have any questions, just chat with us on the bottom right hand corner of your screen. We're here for you!
This post was originally published in 2021 and has been updated to reflect the latest regulatory and policy changes in 2025.
Frequently Asked Questions for ICHRA Plan Documents
What are the common tasks of an HRA plan administrator?
Plan administrator authorities include:
- Interpreting the plan
- Drafting ICHRA participant forms
- Communicating to employees about ICHRA
- Signing documents for plan administration
- Maintaining relevant plan information
- Appointing others to assist in plan administration support
What are the required elements of an ICHRA plan’s legal agreement?
The legal agreement formally establishes the employers ICHRA and must include:
- Named fiduciaries and plan administrators and their responsibilities
- Eligibility requirements for the ICHRA
- Effective dates of participation
- Description of benefits provided and excluded
- How the ICHRA is funded and how it makes payments
- Claims procedures
- HIPAA privacy officers and rules relating to the use of protected health information (PHI)
- Information on federal mandates
- The procedure for amending the plan
- The procedure for plan termination
What does ERISA compliance require for ICHRA plan documentation?
ERISA compliance requires ICHRA plan documents to establish protocols governing plan procedures, including:
- Reimbursement claim filing procedures
- Administrator notification processes for claims-related decisions
- Denied claim appeal handling procedures
While employers have freedom in designing these procedures, ERISA offers some specific guidelines.
Do HIPAA and PHI compliance requirements apply to ICHRA?
ICHRAs provided to organizations with fewer than 50 full-time employees, are exempt from most HIPAA regulations. However, these ICHRAs remain subject to HIPAA Privacy Rules, which dictate the circumstances under which the plan can disclose protected health information (PHI) to the company.
Compliance requires plan documents to designate HIPAA privacy officers (typically the plan administrator), who access participant PHI while ensuring regulatory compliance. Plan documents must include PHI usage and disclosure provisions in accordance with the HIPAA Privacy Rules, plus PHI protection measures aligned with HIPAA Security Rules.
Organizations with 50+ employees must ensure compliance with all HIPAA sections.
What does an ICHRA employee notice need to include?
An ICHRA Employee Notice will need to include the following information:
- Permitted benefit amount per employee & ICHRA start date for employee
- An opt-out provision for the employee
- An explanation of potentially utilizing a premium tax credit if the employee opts out of ICHRA and the ICHRA allowance is deemed unaffordable
- An explanation of what happens with the premium tax credit if the employee accepts to participate in ICHRA
- The employee will need to inform the health insurance Exchange of ICHRA if they apply for APTC
- A statement that ICHRA is not QSEHRA
- Contact Information for employees to contact for help regarding their ICHRA
- Statement that new access to ICHRA qualifies employees and dependents to a Special Enrollment Period (SEP) to purchase insurance from the Exchange for 60 days
