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:
Log in to the Admin Portal
Access the Take Command admin portal using your credentials.
Navigate to the ICHRA Section
Go to the section labeled "ICHRA – Reimbursement Rate" or similar, where you manage ICHRA classes and reimbursement rates.
Select the Class to Update
Identify the class or category you want to adjust (e.g., Single, Couple, Family).
For example, to update the Family category, locate it in the list of classes.
Set the New Reimbursement Amount
Enter the desired monthly reimbursement amount (e.g., $1,500 for the Family category).
Save and Confirm Changes
Save your changes and, if prompted, run any required actions (e.g., "Call Post Save") to apply the new rate to all eligible employees. Verify that the updated rate is reflected in the system.
The employee's monthly reimbursement allowance updates to match the assigned class. Additionally, update company documents in the "ICHRA Company Configurations" section to reflect the new reimbursement rates. After making changes, verify the updated reimbursement rates in the admin portal and notify employees so they can select their plans during open enrollment. Only a company administrator can change an employee's eligibility class (e.g., part-time to full-time), and this change may affect the reimbursement amount. For a comprehensive understanding of rates and policies, refer to your company’s adoption agreement, which is typically available in the document section of your organization’s portal. This document outlines all applicable rates and policies, ensuring transparency and compliance.
When do allowance changes take effect?
Allowance changes take effect prospectively.
Changes generally become effective on the first day of a future month or future plan year. Mid-month changes are not allowed. If a change is made after the start of a month, the new configuration will typically take effect on the 1st of the following month. This ensures clarity and consistency in applying the updated amounts.
Retroactive allowance changes are not permitted.
When Support Intervention is Required
In some cases, reimbursement rate changes cannot be made directly in the admin portal and require support intervention. If this applies:
Submit a request to Support specifying the class, new allowance amounts, and the desired effective date.
Support will process the update, and updated plan documents will be generated and published in your account.
Allowance updates should generally be made before the next plan year begins. Finalize updates during open enrollment to ensure changes apply to the next plan year.
Employers should provide employees with at least 90 days' notice before changes become effective to comply with IRS regulations.
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. For example, if an allowance is increased, the new amount will only apply to future reimbursements and not to any prior months' statements.
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. Individual allowances can also be configured for employees even if the setup interface appears to allow only a single amount for all employees. Additionally, maintaining a higher reimbursement rate for a specific employee, such as a part-time employee at $2,000/month while others are moved to $1,000/month, is permissible as long as the higher rate is clearly marked as 'grandfathered in' to ensure compliance with non-discrimination rules. For example, reimbursement amounts can also be customized by family tiers, such as $2,100/month for an employee plus children, based on local market conditions and budget. Rates may also vary by age and family size, depending on the organization's policies. For example, specific geographic classes, such as OH and KY, may have structured rates that follow the same principles of categorization by age and family size. Additionally, if a class is configured to vary by age, the system automatically assigns the correct rate based on the employee’s age at the time of enrollment.
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.