When an ICHRA ends, the employer must formally terminate the HRA in the Take Command platform, while employees are responsible for independently managing or canceling their individual health insurance with their insurance carrier, since health coverage is not automatically affected by the ICHRA termination.
Responsibilities and Steps for Canceling ICHRAs and Individual Health Insurance Plans
When canceling an Individual Coverage Health Reimbursement Arrangement (ICHRA) or individual health insurance plans, it is essential to understand how the process impacts employers and employees. This guide provides clear steps and answers to common questions on the topic.
Overview of Responsibilities
Employer Responsibilities
Employers must submit the Take Command ICHRA termination form to initiate the cancellation. The form includes selecting the ICHRA’s final end date, usually the last day of the desired month.
Employers are not responsible for automatically canceling employees' individual health insurance plans. Employees must handle plan cancellations directly.
Employee Responsibilities
Employees are responsible for canceling their individual health insurance plans directly with their insurance carrier if they no longer wish to continue coverage after the ICHRA ends.
Employees must also notify Take Command of their coverage cancellation date to update records appropriately.
Any outstanding eligible medical expenses should be submitted for reimbursement before the ICHRA plan ends (e.g., by the final termination date). - Employees must submit claims as recurring premiums or medical expenses before the report generation date to ensure inclusion in reimbursement reports. Claims approved after this date will appear in subsequent reports.
Employees should upload proof of coverage, including plan name, premium amount, effective date, and covered individuals, to facilitate accurate reimbursement processing.
Steps to Cancel an ICHRA
Submit the Termination Form - Complete and submit the Take Command ICHRA termination form. - Specify the last service month in which the arrangement will end. Access and administration for the ICHRA will continue until the selected end date.
Notify Employees - Inform employees about the ICHRA’s end date. - Share guidelines on how it affects their existing individual health insurance plans.
Coordinate Reimbursements - Ensure employees have adequate time to submit outstanding medical expenses for reimbursement.
Download Necessary Reports - Employers should download all required reimbursement payroll reports and other administrative records before the effective cancellation date, as access to the platform will be removed post-cancellation.
Steps for Employees to Cancel Individual Health Plans
Contact the Insurance Carrier - Reach out to your insurance provider directly to cancel your individual health insurance plan. - Clearly state that the plan is individual coverage to ensure proper processing.
Notify Take Command - After canceling the plan with the carrier, inform Take Command about the coverage termination date to update administrative records.
Confirm Cancellation with the Carrier - Employees should obtain confirmation of the cancellation and the coverage end date from the carrier to ensure proper processing and avoid lapses.
Consider Continuing the Plan - Alternatively, employees may choose to keep their current individual plans by paying premiums directly to the insurance carrier.
Automatic Terminations and Exceptions
Natural Terminations: If individual plans are set to expire naturally, such as on December 31 (end of the coverage year), additional cancellation steps are generally unnecessary. Plans will expire in the system without further action.
Employee Actions Required: Canceling an ICHRA does not alter or terminate employees' individual health plans automatically. Employees must take proactive steps if they no longer want coverage.
What happens when an ICHRA is canceled?
When an ICHRA is terminated:
Employer-funded reimbursements stop after the selected end date
Employees lose access to future HRA allowance amounts
Employees’ individual health insurance remains active unless separately canceled
Employees may still submit eligible expenses incurred before the end date within allowable deadlines
ICHRA termination does not automatically cancel or modify health insurance coverage.
Does canceling an ICHRA cancel my health insurance?
No. ICHRA termination does NOT:
Cancel Marketplace or private individual plans
Stop insurance carrier billing
End COBRA, Medicare, or other coverage automatically
Employees must take separate action directly with their insurance provider to cancel coverage.
What happens to reimbursements after the ICHRA ends?
After termination:
No new reimbursements are issued
Employees can still submit eligible expenses incurred before the end date
Claims must be submitted within the standard post-termination submission window
Any unused allowance does not roll over
Reimbursement eligibility is strictly tied to the active plan period.
What should employees do if they are switching plans?
If changing coverage:
Enroll in the new health insurance plan first (if applicable)
Confirm the new plan’s effective start date
Cancel the old plan directly with the insurance carrier
Ensure there is no gap or unintended overlap in coverage
Update coverage information in Take Command
Do employees need to notify Take Command after canceling insurance?
Yes. Employees should notify Take Command after coverage changes so that:
Reimbursement eligibility can be updated
Claims are processed correctly
Records remain compliant for tax and plan administration purposes
Documentation such as cancellation confirmation may be required.