Employees must be enrolled in eligible individual health insurance that provides Minimum Essential Coverage (MEC) to receive tax-free ICHRA reimbursements.
What health insurance is eligible for ICHRA reimbursement?
Employees must enroll in eligible individual health insurance that provides Minimum Essential Coverage (MEC).
Eligible plans typically include:
Individual health insurance purchased through the Health Insurance Marketplace
Individual plans purchased directly from an insurance carrier
Individual plans purchased through a licensed insurance broker
Coverage must satisfy ICHRA eligibility requirements.
What is Minimum Essential Coverage (MEC)?
Minimum Essential Coverage (MEC) is the minimum level of health insurance required for employees to receive tax-free ICHRA reimbursements.
Without MEC, reimbursements may not qualify for favorable tax treatment.
Can employees receive premium tax credits and participate in an ICHRA?
Generally, no. Employees who accept an affordable ICHRA offer are generally not eligible to receive premium tax credits for the same coverage period.
Employees should carefully evaluate their options before accepting an ICHRA offer.
Can family members be covered?
Yes. Employees may enroll family members on the same eligible individual health insurance policy when permitted by the insurance carrier.
Reimbursement eligibility depends on the employer's HRA plan design and applicable ICHRA rules.
What documentation is required?
Employees must provide documentation showing:
Policyholder name
Insurance carrier
Plan information
Coverage effective date
Proof of current coverage
Additional documentation may be requested if eligibility cannot be verified.
What plans are not eligible?
The following types of coverage do not qualify for ICHRA reimbursement:
Employer-sponsored group health plans (including coverage through a spouse's employer)
COBRA continuation coverage
Medicaid
TRICARE
Short-term health insurance plans (not ACA-compliant)
Health care sharing ministry plans
Indemnity or fixed-benefit plans
Dental-only or vision-only plans (these do not satisfy the individual coverage requirement on their own)
Employees should verify their plan is ACA-compliant individual health insurance before relying on it for ICHRA reimbursement. If you are unsure whether a specific plan qualifies — particularly Medicare Supplement (Medigap), off-exchange plans, or non-standard coverage — contact Customer Experience before enrolling.
When does this article not apply?
This article applies only to ICHRA reimbursement eligibility.
Eligibility requirements for other benefit programs may differ.
Key takeaway
Employees must maintain eligible individual health insurance with Minimum Essential Coverage and provide proof of coverage before reimbursements can be approved.