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ICHRA Core Answers: How To Set Up and Self-Administer a 2023 ICHRA for just $199

ICHRA Individual Coverage HRA planBy Gene Ennis
November 04, 2022

You may qualify for the ICHRA or Individual Coverage HRA. The only pressing issue right now would be choosing your future effective date and distributing the required ICHRA 90 Day Notice in advance of that effective date.

Ninety days prior to January 1, 2022 was October 3rd, 2021. If your ICHRA effective date is after January 1, 2022 we can always set up a short plan year for your first plan year, Ex: January 15, 2022 to December 31, 2022; then your next Plan Year is back on a January 1 to December 31 full year.

The main goal of the ICHRA was to allow for employer tax-free reimbursement of individual non-group health insurance to employees without group health insurance options. And to do it in such a way as to allow employees time and required notices to secure coverage. In most cases the ICHRA will eliminate the Exchange Premium Tax Credit (PTC) discounted premium completely. Employees who receive an Advanced Premium Tax Credit discounted premium and an unreported HRA benefit are subject to tax penalties. Reporting the HRA benefit on Box 12 of the W2 will red flag the return if a Premium Tax Credit was also taken.

Regarding Plan Design options you can do Premium Only with no discrimination testing, or you can do Premium and allowed medical, dental, vision, chiropractic, Rx out of pocket expenses too. The Premium & out-of-pocket expense design is subject to discrimination testing so the benefits can’t be top heavy to owners and key people. You can break up benefit levels and benefits by class of employee such as Salaried and Hourly, or Management, Sales, Service, etc. But you can’t pay 2 employees in the same class two different rates unless you use age banding. In this case you need to adhere to a ratio of 3 to 1 meaning your highest paid rate for say age 55 to 64 is $900 a month then the lowest rate for 17 to 20 needs to be at least $300.

The IRS requires that the Plan be in writing and the Department of Labor requires that you provide each employee participating with a Summary Plan Description (SPD) and forms to enroll, select premium elections, and make changes when needed. We provide all that for the one-time fee of $199 in PDF or $249 for the PDF email and Deluxe Binder mailed USPS. Everything you need to set-up and administer your ICHRA in compliance with the IRS, DOL and ACA is provided.

Core Documents have written numerous articles that summarize and even put in graph format the new ICHRA compared to the existing QSE-HRA. See: https://www.coredocuments.com/?s=ichra&submit=OK for all those articles…

But specifically review https://www.coredocuments.com/ichra-or-qse-hra-which-is-best-for-your-business/ for a good side by side comparison of the ICHRA and the QSEHRA.

For a more in-depth look at the 500 page summary of the ICHRA Final Rule document see: https://www.coredocuments.com/coreichra.php

ICHRA Brochure and information needed to establish a ICHRA: https://www.coredocuments.com/wp-content/uploads/2019/10/Core-ICHRA-individual-coverage-HRA-plan-document-brochure-with-forms-2020.pdf

An encrypted online order form: https://www.coredocuments.com/user/ICHRA.php


 

The Core ICHRA Plan Document package provides everything an employer needs to establish an IRS- and DOL-compliant Individual Coverage HRA for employees. Learn how this new HRA restores choice to covered employees and affordability all around in our new ICHRA video.

ICHRA video (Executive summary @ 2:55)