Since the introduction of the Individual Coverage Health Reimbursement Arrangement (“ICHRA”) in 2020, the use and popularity of this tax benefit model has increased with employers of all sizes. As our team observes the growth of ICHRAs in the market, several dynamics are at work:
- More and more service providers are entering the market who will be options to employers who wish to outsource ICHRA administration. Generally, these ICHRA providers focus on large employers and charge significant administrative fees.
- Employers with 2-99 eligible employees have fewer options for outsourcing, and much like traditional HRAs (that predated ICHRA) many small groups are willing to self-administer the benefit.
- ICHRAs involve several important compliance rules and requirements, starting with a required model ICHRA notice for eligible employees. Additional requirements include plan documents (subject to IRS and ERISA rules), claim and appeal rules, PCORI fees, and ACA reporting.
For small employers and other organizations that will choose to self-administer ICHRAs, our goal is to provide an effective solution to assist the employers with plan administration and compliance.
We developed Simple ICHRA to meet this need.
Do you need more information about compliance requirements
and administrative options for employers?
We welcome the opportunity to talk to any advisor or employer about whether Simple ICHRA may be a fit. ICHRA is not a fit for all employers. Every decision about whether to implement an ICHRA and whether to outsource/self-administer is dependent on the population and resources of the organization.