No, employees enrolled in Medicaid cannot participate in an ICHRA because Medicaid is not considered eligible individual health insurance under IRS rules for ICHRA reimbursement.
Can you use Medicaid with an ICHRA?
Medicaid does not qualify as eligible coverage
ICHRA requires employees to be enrolled in individual health insurance coverage that meets federal requirements.
Medicaid is not considered eligible individual coverage for ICHRA purposes, so:
❌ Employees on Medicaid cannot receive ICHRA reimbursements
❌ Medicaid does not meet ICHRA participation requirements
❌ Employers cannot reimburse Medicaid premiums or Medicaid-related expenses through ICHRA
Why Medicaid is not eligible
ICHRA requires qualifying individual health insurance
To participate in an ICHRA, employees must be enrolled in one of the following:
ACA-compliant individual major medical plans (on or off Marketplace)
Medicare (Parts A + B or Part C)
Catastrophic plans (if eligible by age or exemption)
Student health insurance that meets ACA requirements
Medicaid does not meet these requirements because:
It is a government-sponsored public health program
It is not considered individual commercial health insurance
It does not meet ICHRA eligibility standards for reimbursable coverage