* Updated June 25, 2019*
The Individual Coverage Health Reimbursement Arrangement is available for businesses of any size, extending the tax-free reimbursement benefits of QSEHRA to a larger pool of employers. One of the benefits of ICHRA is that it triggers a special enrollment period (SEP), which means an employer can adopt an ICHRA plan at any time of the year and their employees will be able to enroll in a qualifying plan immediately instead of waiting for the next open enrollment period.
What is a Special Enrollment Period?
To participate in ICHRA employees will need to purchase a qualified health insurance plan from the Health Exchange. For employees that haven't had to purchase insurance on their own before, this can be confusing. Typically, there is one time during the year, called Open Enrollment, when plans are available on the individual marketplace for individuals to enroll in. Open Enrollment is typically Nov 1- Dec 15th each year (some states extend the deadline). After Open Enrollment has ended, individuals need a qualifying life event called a Special Enrollment Period to purchase a plan- such as marriage, divorce, having a baby, and moving. ICHRA will trigger a special enrollment period for users, thanks to specifications laid out in final regulations.
Becoming eligible to participate in ICHRA will create a Special Enrollment Period for both the employee and their dependents.
Why Special Enrollment Periods for ICHRA are so great
In the past, we have seen employers who have been excited to offer the QSEHRA benefit to employees mid-year but have had few employees participate because they didn't have health insurance coverage and also didn't qualify for a special enrollment period to purchase a new plan. The result is frustrated employees who have a really, really hard time finding adequate coverage that meets the participation requirement. This new Special Enrollment Period provision is also extending to QSEHRA's in 2020 and we couldn't be happier for our clients as this will make adopting either benefit an easier option outside of open enrollment.
ICHRA simplifies the whole equation, meaning that employers can opt for an ICHRA at any time in the year, and employees can purchase qualifying plans.
How long do you have to enroll in an individual plan once an ICHRA is offered?
Employees with newly gained access to ICHRA will have 60 days to enroll in their health plan of choice. This leaves plenty of time for employees to shop around and truly find the right plan for their individual health needs, especially with Take Command's data-driven individual health insurance shopping platform, which can help them search for affordable plans based on their needs, their prescriptions, and their doctors.
Need More information about ICHRA?
Chat with our team with any questions you may have about these new, tax-friendly benefits or check out our ICHRA FAQ page or our new ICHRA Guide for more information on its background, setup process, requirements, and rules.
I wrote this blog because I love helping people decode confusing insurance jargon and understand the fine print. I'm a licensed health insurance professional and specialize in simplifying health insurance for individuals and small businesses. My QSEHRA articles have been featured regularly on Accounting Today, Accounting Web, HRWeb, and other industry publications. I'm also a member of Take Command Health's client success team and a full-time mom. Learn more about me and connect with me on our about us page. Thanks!