ICHRA

Individual coverage HRA model notice: what to include, when to send

by Keely S.

If you're offering an ICHRA to reimburse your employees for health insurance, then you'll need to give employees a 90 day notice before each new HRA plan year, to allow them plenty of time to find a qualified health plan. Read on for what needs to be included in the individual coverage HRA model notice and when you should send it. 


Individual coverage HRA (ICHRA)

With its flexibility, efficiency, and affordability, the individual coverage HRA is a great option for employers. It's great for employees too, since they can choose the plan that works best for them instead of a one-size-fits-all group plan. But for companies transitioning from a group plan to an individual coverage HRA plan, or if they're offering benefits for the first time, there's bound to be a learning curve with this new benefits model. That's why communication is key!

An employee who is offered an ICHRA must receive written notice at least 90 days before the beginning of the ICHRA’s plan year. Remember that employees who become eligible during the plan year, or later than 90 days before the start of the plan year (such as new hires), will get their notice no later than the date on which their coverage under the ICHRA can begin.

What should the ICHRA model notice include?

Each ICHRA employee notice should include the following pieces of information:

  • The maximum reimbursement amount for each participant
  • HRA effective date
  • Start and end dates for the plan year
  • A statement that enrollment in a qualified health plan (individual coverage, Medicare) is required to participate
  • A statement that coverage obtained through the ICHRA is not ERISA coverage
  • A statement that the participant can opt out of and waive future HRA reimbursements
  • Rules on how the HRA interacts with the premium tax credit including that employees cannot get a tax credit if they are offered an affordable HRA
  • A statement that the participant must inform any exchange to which the participant applies for advance payment of the PTC

When do I need to send out an individual coverage HRA notice?

Employers are required to notify their employees of their new benefit 90 days prior to coverage beginning.

Here's a real life example.

For 2021 coverage starting January 1st, 90 days' notice would mean you would send employee notices October 3rd. Our platform generates the documents for you, which means that the deadline would be September 29th. 

Need help with the Individual coverage HRA?

Our team of design consultants is waiting to help you. Individual Coverage HRAs are a simple benefit that can be designed to maximize your health budget (not to mention ICHRA setup is so easy!).  You can chat with our team with any questions you may have about these new, tax-friendly benefits. We would be happy to help. If you have general questions about the ICHRA, we’ve got a ton of resources for you. Our comprehensive guide is here. Frequently asked questions are here

Other helpful ICHRA resources:

 

Picture of Keely S.

Hi, I'm Keely S.! A wife to one and mother to four, Keely does all of the things. She’s also dabbled in personal finance blogging and social media management, contributed to MetroFamily magazine, and is passionate about good food, treasure hunting and upcycling. With a B.S. in Psychology from the University of Oklahoma and a knack for a witty punchline, it’s no surprise that Keely’s social posts are as clever as they get. In her (very little) free time, you’ll find Keely with her nose in a book or trying out a local restaurant with her family.