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ICHRA rules


Employee elections

Employee election of coverage is for the duration of the plan year and may only be changed during the plan's annual open enrollment period unless the participant wishes to opt out of the ICHRA or qualifies for a special enrollment period.

Opt-out provision

The employer must offer, at least once per plan year, an opportunity for participants to opt out of the ICHRA.


Annual substantiation of coverage for the plan year

An individual coverage HRA must require proof of individual health coverage no later than the first day of the plan year. The employer may set any reasonable date that meets this rule.Also, when an employee or dependent becomes eligible after the first day of the plan year, initial substantiation of coverage is required within a reasonable timeframe as determined by the employer.

Ongoing substantiation for reimbursement requests

The employee must provide ongoing substantiation of individual health coverage with every request for reimbursement for the participant and their dependents throughout the plan year.

Acceptable types of substantiation

The IRS has provided model forms for both annual and ongoing substantiation. These forms and the written notice are customized in your ICHRA plan document package.

Special Enrollment Period for Individual Health Coverage

Individuals may only purchase individual health coverage policies on the open market or an exchange during the annual open enrollment period, usually November 1 through December 15 of the calendar year preceding the effective date of January 1 for those plans. There are circumstances that allow individuals a special enrollment period to make changes to individual health coverage outside of the standard period. 

Special enrollment period for new hires, ICHRA eligibility

ICHRA rules allow that individuals becoming eligible to participate in an ICHRA for the first time be allowed a special enrollment period for the plan year in which they are able to participate. This is for the first year only.

Special enrollment period for life events

A special enrollment period applies when a participant or covered dependent experiences a life event that can significantly impact their health coverage. These include a birth, death, divorce, and similar events. For more information on this please contact us.

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