Page 41 - Delaware Medical Journal - September/October 2020

CASE REPORT MSDIS CORNER
doing so, your practice can control its health care budget with a defined per- employee amount paid each month.
Let’s take a closer look at the ICHRA and see how it can benefit the practice as well as the employee. Purchasing an ICHRA permits the practice to reimburse employees for the cost
of individual insurance as well as expenses that qualify as medical care under Code Section 213(d). Your employees and their family members will have a maximum dollar amount that the employer makes available each year. The employer may allow unused amounts in any year to roll over into the next year.
Your employees must meet certain insurance requirements in order to qualify for the ICHRA. Employees must enroll in individual health insurance (or Medicare) for each month the employee (or the employee’s family member) is covered by the ICHRA. This can be individual health insurance offered on or off an exchange. However, it cannot be short-term, limited-duration insurance (STLDI) or coverage consisting solely of dental, vision, or similar “excepted benefits.”
Employers may either offer an ICHRA or a traditional group health plan, but may not offer the same employees a choice between the two. If an employee buys individual health insurance outside an ACA exchange and the HRA doesn’t cover the full premium, the employer could permit the employee
to pay the balance of the premium for the coverage on a pre-tax basis through its cafeteria plan, subject to other applicable regulations, according to the Internal Revenue Service’s FAQs. However, the tax code states that an employer may not permit employees to make salary reduction contributions to a cafeteria plan to purchase coverage
offered through an ACA exchange.
Your practice must not discriminate
or offer differing terms to employees, unless the ICHRA is offered on the same terms to each participant within a permitted class.
CLASSES OF EMPLOYEES FOR ICHRA PURPOSES
Employers can create classes of employees around certain employment distinctions, such as the following:
Full-time employees
Part-time employees
Employees working in the same
geographic location (generally, the same insurance rating area, state, or multi-state region)
Seasonal employees
Employees in a unit of employees
covered by a particular collective
bargaining agreement
Employees who have not satisfied a
waiting period
based income
Salaried workers

hourly workers)
Temporary employees of staffing
firms, or
Any group of employees formed by
combining two or more of these 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.
Good news for employers: there is
no minimum employer contribution required. Employers that offer an ICHRA must do so on the same
terms for all employees in a class of employees, but they may increase the ICHRA amount for older workers and for workers with more dependents.
An ICHRA is permitted to reimburse employees for the cost of individual insurance as well as medical care expenses that qualify as medical
care under Code Section 213(d) for employees and their family members. ICHRAs that reimburse solely for individual coverage premiums would not disqualify contributions to an HSA if the individual otherwise meets the requirements of being enrolled in a high-deductible health plan with no other disqualifying coverage. However, ICHRAs also can only be used to reimburse medical expenses consistent with existing HRA rules. If the ICHRA reimbursed for first-dollar cost-sharing
NEW HIRE RULE:
EMPLOYERS MAY MAINTAIN THEIR TRADITIONAL GROUP HEALTH INSURANCE PLAN FOR EXISTING PARTICIPANTS AND OFFER NEW EMPLOYEES AN ICHRA.
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