ICHRA has three main components of rules and regulations that will be discussed within this article: the ICHRA plan document, the ICHRA notice requirement, and 3 employer/employee rules of ICHRA.
The ICHRA Plan Document
The ICHRA plan document is one of the first steps to set up the HRA, this is a document required by the Employee Retirement Income Security Act (ERISA) and IRS to legitimize the plan.
These items are required or good to have in the plan documents:
- Named fiduciaries, plan administrators, and their specific responsibilities
- Eligibility requirements for the ICHRA plan
- The date of participation
- Benefits description (what’s included and excluded)
- How the claims are handled
- Plan termination procedures
- Federal Mandates
- How the plan is funded
- Amendment procedures
- Protected health information and HIPAA rules
The ICHRA Notice Requirement
According to federal regulation, businesses offering an ICHRA are required to adhere to a 90-day notice period before each plan year. That means, 90 days before the ICHRA’s start date, HRA administrators must notify employees about the newly available benefit and that they are eligible to participate.
The 90-day notice must be provided every year the business chooses to offer the ICHRA.
For employees who become newly eligible (like employees who gain eligibility after the beginning of the plan year, or newly hired employees), the notice requirement is different. A business has the option to provide the notice any time until the first day the employee’s ICHRA coverage begins. It is best practice to provide notice as soon as possible. That ensures the employee has time to review their coverage options and select an insurance plan.
These are the items the notice must include:
- A description of the terms of the ICHRA.
- A statement of the right of the participant to opt-out of and waive future reimbursement under the HRA.
- A statement on how the ICHRA will affect premium tax credit (PTC) availability, whether the employee opts out, or chooses to accept the benefit.
- A statement that the participant must inform any exchange to which they apply for advanced premium tax credit (APTC) of relevant information.
- A statement about how the ICHRA differs from other HRAs.
- A statement about the availability of a special enrollment period (SEP) for employees and dependents who gain access to the HRA.
- A statement about how the participant can find assistance for determining their individual coverage HRA affordability.
- A statement that the ICHRA can be integrated with Medicare. Employees must be informed that Medicare can be integrated with the ICHRA.
- Contact information of an individual or a group of individuals for the participants to contact with questions regarding their ICHRA.