ICHRA and Traditional Group Health Coverage Rule to the same ICHRA class of employees.

[Scott A. Davis]

Is a Plan Sponsor offering only Group MEC coverage to an eligible ICHRA Class of employees, also allowed to offer an ICHRA to that same Class of employees, since Group MEC is not Traditional Group Health Coverage (MVP), (only MEC), nor an Excepted Benefit under ICHRA Rules?  Same for offering the same ICHRA Class of employees both ICHRA and Group GAP coverage which covers a stated $ benefit amount of Deductible and Coinsurance?  Thanks, as I have been asked both, but can not find a definitive answer.

 

 

[Brian Gilmore]

I don't see how the MEC arrangement could work.  Clearly that's not an excepted benefit regardless of whether it provides minimum value.

Perhaps the second arrangement could work if the other coverage could qualify as an excepted benefit.  You'd want a definitive determination of excepted benefit status to move forward.

Treas. Reg. § 54.9802-4(c)(2):

(2) No traditional group health plan may be offered to same participants. To the extent a plan sponsor offers any class of employees (as defined in paragraph (d) of this section) an individual coverage HRA, the plan sponsor may not also offer a traditional group health plan to the same class of employees, except as provided in paragraph (d)(5) of this section. For purposes of this section, a traditional group health plan is any group health plan other than either an account-based group health plan or a group health plan that consists solely of excepted benefits. Therefore, a plan sponsor may not offer a choice between an individual coverage HRA or a traditional group health plan to any participant or dependent.

[Scott A. Davis]

Thanks Brian,

[Christine Zinter]

I agree, a MEC can't be offered with an ICHRA because a MEC is, by definition, a group health plan. The fact that it doesn't provide minimum value is irrelevant to its status as a group health plan.

I'm not familiar with the term "Group GAP coverage" but what you described sounds like an HRA that reimburses for certain medical expenditures up to a maximum dollar limit. An HRA (established under Section 105(h)) is also, by definition, a group health plan and, as an HRA by itself it is supposed to be integrated with an underlying group health plan. Standalone HRAs were prohibited by the ACA. 

 

[Luke Bailey]

Scott, tell them to take whatever they were going to pay for the "group MEC" or "group gap" coverage and just add that to what they are going to contribute to the employees' ICHRAs.

[Scott A. Davis]

Thanks Christine and Luke, agreed Group GAP is a fully insured HRA with many carriers.