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).
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.
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.
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.
Frequently Asked Questions
Will employees’ health insurance plans end automatically when the employer cancels the ICHRA?
No. Employees’ plans are not canceled automatically. Employees can either continue their plans by paying premiums directly to the carrier or contact the carrier to end coverage.
Do employees need to notify Take Command if their health insurance plan ends naturally at the end of the year?
No. When a plan naturally ends (e.g., on December 31), there is no need to notify Take Command, as the plan expiration is automatically recorded in the system. By following these guidelines, employers and employees can effectively navigate the cancellation of ICHRAs and individual health insurance plans.