Managing and Updating Your ICHRA Plan for the Upcoming Year
Maintaining and updating your ICHRA plan for a new plan year requires careful attention to deadlines, contribution updates, and communication requirements. Below, we outline the critical timelines, processes, and considerations to ensure smooth transitions and compliance.
Key Deadlines for ICHRA Updates
Finalizing Reimbursement and Contribution Amounts: - To meet the IRS-required 90-day advanced notice to employees, finalize any plan design changes (including reimbursement and contribution amounts) well ahead of this window. For a January 1 start, updates should ideally be finalized by mid-September. Waiting until October is possible, but completing changes sooner supports better communication and preparation.
New Plan Rates Visibility: - Updated insurance rates generally become available in early to mid-November, allowing you to compare and select options during Open Enrollment.
Adjusting After Rate Review: - You can adjust ICHRA contribution amounts even after reviewing these rates in November. Make any changes as soon as possible, ideally by early December, to avoid disruptions. Changes go into effect the month following their application.
Making Configuration Changes or Maintaining Current Plans
No Action Required for Unchanged Plans: - If your organization plans to keep the same ICHRA setup and contribution amounts for the next year, no additional action is required on your end. The system will maintain your current configuration automatically.
Effectiveness of Changes: - Updates to reimbursement amounts must be finalized during the Open Enrollment period for them to take effect at the start of the plan year. Timing these updates correctly ensures all eligible employees benefit from the changes once the new plan year begins.
Ending Your ICHRA Plan
If your organization decides to terminate its ICHRA and transition to a different health coverage model, such as a small group health plan:
Notice Requirements: - You may end your ICHRA at any time; the IRS 90-day advanced notice rule applies only to renewing or continuing an ICHRA and not to ending it. While mid-September is often recommended for renewals, it is not a hard cutoff for ICHRA terminations.
Planning Ahead
To ensure smooth implementation and compliance:
Start early: Plan design updates and communication requirements take time, and starting early supports clear messaging for employees.
Use visibility timelines: Leverage the availability of plan rates in November to finalize your decisions and ensure contributions align with employee needs.
Automate, where possible: Let the backend system maintain unchanged configurations to streamline your process.
Proactive planning and adherence to deadlines will reduce administrative burden and help your organization maximize the benefits of the ICHRA model while ensuring compliance across plan years.