* Updated June 19, 2019*
So you've decided to set up an ICHRA and choose an ICHRA administration tool! Good work. Your company or client is going to enjoy some major benefits very soon. ICHRA will be effective Jan 1, 2020, but it's never too early to start getting your ducks in a row when it comes to all that dreaded paperwork. Don't worry! We've got you covered.
Even though ICHRA (aka the Individual Coverage HRA) will not be available until January 2020, businesses are already preparing for this switch and will be able to get the ball rolling in Q4 of this year. That's why we want you to understand everything you'll need so you can be ready to go when the time comes.
ICHRA plan documents you'll need
The legal agreement establishes the ICHRA for the employer.
The legal agreement should 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
Employees must be provided a written notice in the form of a Plan Summary. The Plan Summary is a condensed, user friendly explanation (psst: go easy on the legal-ease!) of the ICHRA benefit and how it works. This is a great place to include information on the different classes of benefits and a helpful link to the Take Command Health platform if employees need help choosing the most affordable plan based on their unique needs, doctors, prescriptions, etc. Giving employees as many resources up front will ease the transition, especially if they are shopping on the individual market for the first time.
ICHRA Employee Notice
Since the Individual Coverage HRA requires employees to purchase insurance for themselves (as opposed to picking a tier option from an employer sponsored group health plan), the employee notice is designed to guide employees in the process of purchasing health insurance from the marketplace which can be confusing if they haven't done so before. Individual Coverage HRAs must provide a 90 day notice to eligible employees regarding the ICHRA and its interaction with premium tax credits and of 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 an advanced premium tax credit (APTC) 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 chooses to participate in ICHRA program.
- The employee will need to inform the health insurance Exchange of ICHRA if they apply for an APTC.
- A statement that ICHRA is not QSEHRA.
- Contact Information for employees to get help regarding their ICHRA.
- Statement that new access to ICHRA qualifies employees and dependents for a Special Enrollment Period (SEP) to purchase insurance from the Exchange for 60 days.
Check out our post on the 90 day notice for the individual coverage HRA for more information.
How Can Take Command Health Help?
Does this sound confusing, expensive or both? Don't worry. We are here to make your life easier. With our ICHRA administration tool (which we are so excited to launch!), set up will be a walk in the park. We'll handle all the accounting and legal legwork, take care of on-boarding each of your employees (or clients), and make tax time easy and painless. We are currently designing innovative tools that will make this process as simple and intuitive as possible.
Want to learn more? Check out our brand new ICHRA guide or chat with one of our HRA experts online. We'd be happy to help!