Yes, employees enrolled in qualifying Medicare coverage (Parts A and B or Medicare Advantage Part C) can participate in an ICHRA and receive tax-free reimbursements for eligible premiums and medical expenses.
Can Medicare be used with an ICHRA?
Yes, Medicare can qualify for ICHRA reimbursement
Employees who are enrolled in Medicare may participate in an ICHRA if they have qualifying coverage.
To be eligible, the employee must have:
Medicare Part A and Part B, or
Medicare Part C (Medicare Advantage)
When this requirement is met:
✔ Medicare premiums may be reimbursed tax-free
✔ Certain supplemental Medicare plans may also be eligible
What Medicare coverage is eligible
Only specific Medicare configurations qualify.
Eligible Medicare coverage for ICHRA:
Medicare Part A + Part B
Medicare Part C (Medicare Advantage plans)
Medicare Part D prescription drug plans (if separately billed)
Medigap (Medicare Supplement) plans
Dental, vision, and hearing add-on premiums (if individually purchased)
Not eligible on its own:
❌ Medicare Part B alone (does not meet eligibility requirements by itself)
What can be reimbursed under Medicare + ICHRA
Eligible expenses include premiums and qualified medical costs
If Medicare eligibility requirements are met, employees may be reimbursed for:
Monthly Medicare premiums
Medicare Advantage plan premiums
Prescription drug plan premiums
Medigap supplemental coverage
Qualified medical expenses not fully covered by Medicare (IRS Section 213(d) rules apply)