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ICHRA For Small Employers


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Based on my reading of the ICHRA regulations, it would be mathematically impossible for an employer with, hypothetically, one full-time employee and nine part-time employees, to establish an ICHRA for the part-timers because the "class" for purposes of the ICHRA is fewer than 10 employees.

Is this correct or am I missing something?

Thanks and happy New Year!

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 The 18 page FAQ is very helpful unitl the final IRS rules are release. below NAHU Read More with links or attached depending on what you have access to.

 

So if the group is not using class distinctions, they have 10 employees.  Check with a TPA that sets up these ICHRAs to to confirm.

To prevent adverse selection in the individual market, a minimum class size rule applies if you offer a traditional group health plan to some employees and an Individual Coverage HRA to other employees based on: full-time versus part-time status; salaried versus non-salaried status; or geographic location, if the location is smaller than a state. Generally, the minimum class size rule also applies if you combine any of these classes with other classes. The minimum class size is:

·           Ten employees, for an employer with fewer than 100 employees,

·           Ten percent of the total number of employees, for an employer with 100 to 200 employees, and

·           Twenty employees, for an employer with more than 200 employees.

Administration Releases Final Rule on HRAs – From NAHU

The final rule establishes new parameters to allow employers to offer an HRA to be used for the purpose of purchasing individual health coverage in lieu of a traditional group health plan... Read More

 

New Indvidual Coverage and Excepted Benefit Health-Reimbursement-Arrangements EBSA DOL CMS HHS IRS 6.13.2014.docx

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