Employers can use ICHRA employee classes to offer different eligibility rules and reimbursement amounts to different groups of employees, provided the classes are based on permitted job-related criteria.
What are ICHRA employee classes?
ICHRA employee classes are predefined groups of employees that determine:
Who is eligible for the ICHRA
How much reimbursement they receive
When they become eligible
Whether they can submit medical expenses in addition to premiums
Classes must be based on objective employment-related criteria and cannot be based on health status or medical conditions.
How Do I Set Up and Manage ICHRA Employee Classes?
Setting up and managing Individual Coverage Health Reimbursement Arrangement (ICHRA) employee classes involves defining specific parameters to ensure eligibility and reimbursement align with your organizational needs. Below, you’ll find a comprehensive guide to create, configure, and troubleshoot ICHRA classes for your employees, regardless of employment type or location.
Step 1: Determining Class Parameters
When creating a new ICHRA employee class, you’ll need to gather key information. The following parameters should be defined clearly:
1. Employee Classification
Identify the type of employees who will belong to this class. Examples include:
Full-time employees
Part-time employees (define criteria, e.g., <30 or <40 hours per week)
Seasonal workers
Salaried vs. non-salaried employees
Employees from the same geographic area (e.g., a specific state such as Colorado)
Non-resident aliens without U.S. income
Employees under age 25
Employees who have not completed 90 days of service
Union employees (unless specified in a union agreement)
2. Waiting Period for Eligibility
Specify how soon the employees are eligible to benefit from the ICHRA based on their hire date. Common options include:
0 days (immediate eligibility)
30, 60, or 90 days
3. Reimbursement Type
Determine whether employees can claim reimbursements for:
Premiums only
Premiums and qualified medical expenses (e.g., copays)
4. Reimbursement Rate Structures
Establish how much will be reimbursed for different coverage tiers:
Employee Only
Employee + Spouse
Employee + Children
Employee + Family
Include specifics such as age-based variations in reimbursement amounts (e.g., increases by age, with a base age of 26).
Step 2: Configuring and Managing Employee Classes
After defining parameters:
Create the Class: Use your organization’s ICHRA administrative tools to input the defined parameters for the desired employee group.
Assign Employees: Add eligible employees to their respective classes while excluding those who don’t qualify (e.g., part-time or hourly employees for full-time-only plans). There’s no need to create an ineligible class—simply omit those workers from the eligible group. Ensure that all eligible employees are included in the ICHRA roster. If an eligible employee opts out of participation, record their decision as a waiver, either through the system or via an administrator-submitted waiver form. Proper documentation of waivers helps maintain compliance and prevents billing for non-participating employees.
Manage Revisions: As your organization grows or employee groups change (e.g., new geographic locations or job structures), revise class definitions to align with updated criteria.
Default Exclusions: Part-time, seasonal employees, and other categories not explicitly included in a class will automatically be excluded. Ineligible employees should not be added to the ICHRA roster or assigned to a default class. Avoid creating unnecessary classes for ineligible employees to streamline administrative tasks and ensure only eligible participants are considered for reimbursement.
Take Command Navigation: Log into the HRA Hub, navigate to "Employee Roster," and locate the employee whose class you want to edit. Click the three dots next to their name and update their classification.
Step 3: Troubleshooting Common Issues
Issue: The new class doesn’t appear in the portal
Explanation: If your organization was migrated to the HRA Hub, the new classes will appear there instead of the legacy portal.
Solution: Log in to the HRA Hub to view and manage employee classes. Assign employees using the updated interface.
Compliance Tip: Maintain accurate documentation of all changes, including waivers and eligibility updates, to ensure adherence to ICHRA and ACA requirements.
Issue: An ineligible employee or dependent was mistakenly included in the ICHRA.
Solution: Update their status in the employer portal by setting a separation or termination date effective back to the ICHRA plan start date. Submit an ICHRA waiver form for the participant and ensure it is uploaded by the monthly billing cutoff. Retain signed records for compliance purposes.
FAQs: Special Scenarios
Q: What details are essential for ICHRA class setup in unique circumstances, such as new states?
Include geographic-specific classifications and adjust reimbursement rates as necessary. Maintain consistency across all other parameters (e.g., employee classifications, coverage tiers).
Q: Are there templates for full-time employee-only eligibility?
Configure the class to include solely full-time, salaried employees. There’s no requirement to create additional classes for employees who aren’t eligible.
Conclusion
Efficiently setting up ICHRA employee classes involves careful planning around eligibility, reimbursements, and employee groupings. By understanding the necessary configurations and resolving common challenges, your organization can maximize the benefits of ICHRA offerings for its workforce. Ongoing management of ICHRA eligibility and enrollment is equally critical. Ensure compliance by maintaining accurate rosters, documenting waivers, and addressing retroactive changes promptly. By adhering to these practices, employers can effectively manage their ICHRA programs while meeting regulatory standards.