Employers can update employee reimbursement allowances by changing an employee's ICHRA class or updating future plan-year allowance amounts. Allowance changes cannot be applied retroactively.
How do I update an employee's reimbursement allowance?
To update an employee's allowance:
Sign in to the Employer Portal.
Open the employee's profile.
Assign the employee to the appropriate ICHRA class.
Save your changes.
The employee's monthly reimbursement allowance updates to match the assigned class.
When do allowance changes take effect?
Allowance changes take effect prospectively.
Changes generally become effective at the beginning of a future month or future plan year.
Retroactive allowance changes are not permitted.
Can I change reimbursement amounts during the current plan year?
Allowance updates should generally be made before the next plan year begins.
Employers should also provide any required employee notice before changes become effective.
Can reimbursement allowances be backdated?
No. ICHRA reimbursement allowances cannot be applied retroactively.
Eligible reimbursements are based on the allowance in effect during the applicable coverage period.
Can different employees receive different allowances?
Yes. Employers may establish different monthly allowances for different employee classes and coverage tiers, provided the plan complies with applicable ICHRA rules.
When does this article not apply?
This article applies only to Individual Coverage HRAs (ICHRAs).
It does not apply to Qualified Small Employer HRAs (QSEHRAs), which follow different reimbursement rules.
Key takeaway
Employee reimbursement allowances are managed through ICHRA classes and future plan-year configurations. Allowance changes must be made prospectively and cannot be applied retroactively.