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Human Resources


WHAT TO LOOK FOR IN AN ICHRA ADMINISTRATOR




Have you heard? There’s a new HRA (Health Reimbursement Arrangement) available
called the Individual Coverage Health Reimbursement Arrangement, or ICHRA.
Introduced in 2020 by the U.S. government, the ICHRA gives employers another
option they can offer employees beyond the usual, traditional job-based
healthcare plans. Better yet, the ICHRA is tax free.

 

However, since the ICHRA is still relatively new, it’s important to identify a
knowledgeable and experienced ICHRA administrator to help you implement this
beneficial healthcare option and stay compliant around its regulations. Let’s
dive in and find out how.

 

First, what is the ICHRA?

 

An HRA is an employer-funded health plan that reimburses employees for qualified
medical expenses and, in some cases, insurance premiums. An ICHRA is a formal
group health plan that allows organizations of all sizes to reimburse their
employees — tax free — for their individual health insurance premiums,
out-of-pocket healthcare expenses, other qualifying medical expenses.

 

Previously, employees couldn’t pay their individual health insurance premiums
with HRAs, but with ICHRAs, they can. ICHRAs allow employees to purchase their
own individual or family health insurance, be reimbursed for the monthly premium
— and enjoy tax advantages, since the ICHRA is an IRS-approved health benefit.
An ICHRA account’s funds are not subject to taxes and can be used to pay for
wide-ranging healthcare costs — such as premiums, co-pays, and dental and vision
expenses.

 

ICHRAs provide a great alternative for employers looking to save on premium
costs while offering employees greater choice in health coverage.

 

What is an ICHRA administrator, and what does their role entail?

 

An ICHRA administrator helps businesses implement and manage their ICHRAs. These
professionals can be key partners in helping businesses establish and maintain
ICHRAs that are compliant with the IRS.

 

Although setting up an ICHRA can be a fairly easy process, an ICHRA
administrator is responsible for making sure all rules and regulations are
followed. They are responsible for overseeing the entire ICHRA process of
implementation and performing these duties:

 

 * Assist with the setup of the ICHRA. The ICHRA administrator helps design the
   plan, determine employee eligibility and budgets, and set up legal documents.
 * Help employees enroll in the ICHRA. A successful ICHRA launch requires change
   management efforts. A plan administrator will assist with communicating the
   new plan to employees and assisting them with enrollment.
 * Process reimbursements. An ICHRA administrator will oversee reimbursement
   processing, whereby employees provide proof of their qualified medical
   expenses including individual insurance premiums.
 * Manage changes to the ICHRA rules and regulations. As healthcare policy
   continually evolves, the administrator stays up to date on the latest rules
   and regulations to help prevent fines for employers.
 * Answer employee questions. After employees sign up, an administrator will
   facilitate questions and answer regarding reimbursements, while maintaining
   the employee’s privacy.

 

How to find a top-notch ICHRA administrator

 

When looking for an ICHRA administrator, be sure to ask questions that will help
you understand the capabilities of the administrators you are considering and
ensure they’re a good fit for your company. Ask critical questions around:

 

Reputation and customer service

 

 * How long has the ICHRA administrator been working with ICHRA plans?
 * How many clients do they have?
 * Do they have a good reputation and track record with their clients?
 * Do they have any negative reviews? If so, why?

Plan design

 * What are the details of their ICHRA plans?
 * Can they help you determine a reasonable, affordable budget for your ICHRA?
 * Can they ensure your ICHRA plan meets all legal and IRS requirements?

 

Enrollment and reimbursements

 

 * What ICHRA education do they offer employees?
 * How do they help employees choose and enroll in the right plan for them?
 * Do they offer an easy-to-use platform for reimbursements?
 * Do they offer ongoing customer support throughout the year?

Other things to consider when searching for the right ICHRA administrator

Process, compliance, and reporting. Check to see if they offer services around:

 * Legal plan documentation and plan summaries
 * Employee MEC verification
 * Tax reporting, IRS deadlines, year-end W2 Reporting, Form 720 (PCORTF),
   COBRA, Administration (if not exempt), ERISA
 * HIPAA and PHI compliance
 * A process to substantiate employee claims
 * A reimbursement mechanism

 

Employee Communication. When considering an administrator, ask about their
change management communication plan. See if they provide:

 

 * Communication materials for employees and a strong onboarding process
 * Employee support while they’re shopping for individual health insurance plans
 * An easy-to-use platform to request reimbursements
 * Employer support with understanding compliance and legalese
 * A quick, easy sign-up process and platform dashboard

 

More help with finding the right administrator

 

Since ICHRAs have only been around a few years, it could be challenging to find
an experienced administrator. However, by knowing what to look for and ask,
you’re now on your way to finding an experienced administrator who can address
your company’s unique needs, challenges, and opportunities in implementing an
ICHRA plan.

 

Enrollme can help with your company’s ICHRA needs. Learn more about Enrollme or
schedule a consultation and demo today.


Sources

https://www.takecommandhealth.com/blog/ichra-administrator

https://www.ehealthinsurance.com/resources/small-business/ichra-administration-guide

https://www.peoplekeep.com/individual-coverage-hra-ichra

https://www.takecommandhealth.com/blog/ichra-vs-hra

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