ICHRA Notice

Available to organizations of all sizes, ICHRAs (Individual Coverage Health Reimbursement Arrangements) allow employers to reimburse their employees for their individual health insurance premiums and qualified out-of-pocket medical expenses. Reimbursements are income-tax-free for employees and free of payroll taxes for employers.

The ICHRA notice informs eligible employees about how an ICHRA works so they can decide whether they want to opt in or out of the benefit. It also explains how they can purchase individual health insurance coverage and navigate premium tax credits if they opt in to the ICHRA.

Requirements

• Only for employers that have an Individual Coverage HRA (ICHRA)

• The IRS has provided a template an employer may use in order to satisfy the requirement: click here to view template. (Instructions for employer starts on page 7, model notice starts on page 8).

When is the deadline?

• A notice must be provided to employees at least 90 days before the start of each plan year or no later than the date an employee is first eligible to participate in the ICHRA (for a new hire).

• If the ICHRA is established less than 120 days before the beginning of its first plan year, the notice for the first plan year can be provided no later than the date on which the ICHRA is first effective for the participant.