Managing and Updating Employee Reimbursement Rates
Keeping employee reimbursement rates up to date is essential for compliance, employee satisfaction, and operational efficiency. This guide outlines the processes, rules, and tools available through the Take Command platform to manage and adjust reimbursement rates effectively.
Overview of Reimbursement Rate Updates
Reimbursement rates for employees often require annual updates, particularly to keep up with regulatory requirements and market changes:
New Rates and Notifications: Updated insurance rates are typically released each year in early to mid-November. Employers must notify employees of any changes 90 days before the start of the program year (e.g., by October 3rd), ensuring IRS compliance. Employers should finalize design changes and program renewals by September 12th. Take Command generates the necessary Employee Notices for the upcoming year and shares them through employee portals. Keeping an eye on platform communications in November is crucial to stay informed.
Effective Dates for Rate Changes
Reimbursement rate updates must adhere to specific timing rules:
Changes to reimbursement rates take effect in the following month, even if submitted on the 1st of the current month. Mid-month changes cannot be applied retroactively to the current month's rate.
Reimbursement allowances are non-retroactive. If updates are made after the 1st of the month, they apply starting the next month. Contribution updates during the year require a 90-day notice.
Key notes:
Allowances can be set by employee class, such as state, role, or other criteria. They may also vary by age or number of dependents.
There are no minimum or maximum ICHRA contribution limits for reimbursement policies.
Considerations for Monthly Allowances and Age-Based Adjustments
Uniform Monthly Allowances: Allowance rates, such as $125/month, can apply consistently to all employees across coverage types (e.g., Single, Couple, Family).
Age Curve Implications: While the federal age curve (used by most states) influences premiums, the curve itself rarely changes annually. Premiums may adjust yearly, but updates to the age curve depend on federal or state regulatory changes.
Conclusion
By adhering to the timing, regulatory, and platform guidelines described above, you can successfully manage reimbursement updates for employees. Utilizing tools like the Take Command admin portal ensures accuracy and compliance while offering flexibility for customizing allowances. Always plan ahead for deadlines, such as IRS and program year requirements, to avoid disruptions.