Sec 105 one-person coverage vs ICHRA

[SKSP]

My client wants to reimburse an employee for part of their health insurance premium. A one-person Sec 105 seems the simplest way to go.  But...there are actually three W-2 employees, one of whom is full-time.  Those other two employees both wish to decline coverage as they already have full coverage from their spouse.  I don't see a way to separate them into classes.

Do the two eligible non-participants prevent us from make adopting the one-person 105?  At a $100/day penalty, I don't want to mess it up.

Thanks in advance

 

[Brian Gilmore]

§105 is a Code section rather than a type of plan.  I'm assuming you're referring to an HRA.  As long as it covers fewer than two employees, it should be fine.  But given there are other employees who may potentially participate (either now or in the future), seems like an ICHRA is the way to go to easily avoid this issue.