To qualify for ICHRA reimbursement, employees must be enrolled in an individual health insurance plan that meets Minimum Essential Coverage (MEC), such as an ACA-compliant major medical plan, Medicare, student health insurance, or certain catastrophic plans, while excluding group coverage and most non-ACA plans.
What makes a plan eligible for ICHRA?
An eligible ICHRA plan must be individual health insurance coverage that meets federal Minimum Essential Coverage (MEC) standards.
To qualify, the plan must:
Provide essential health benefits
Have no annual or lifetime dollar limits on essential coverage
Include preventive care coverage as required under federal law
Be active and in force during the reimbursement period
Employees must be enrolled in qualifying coverage each month they receive reimbursement.
What plans qualify for ICHRA reimbursement?
The following types of coverage are eligible:
Individual major medical plans
ACA-compliant plans purchased on the Marketplace (Healthcare.gov or state exchange)
ACA-compliant plans purchased off-exchange (direct from insurer)
Bronze, Silver, Gold, and Platinum plans
Medicare
Medicare Part A and Part B together
Medicare Part C (Medicare Advantage)
Catastrophic coverage
Available only to individuals under age 30 or those with a qualifying hardship exemption
Student health insurance
Coverage provided through eligible college or university-sponsored plans
What plans do NOT qualify for ICHRA?
The following coverage types are not eligible for reimbursement:
Employer-sponsored group health plans (including a spouse’s plan)
COBRA coverage
Medicaid
TRICARE
Short-term health insurance plans
Health care sharing ministry plans
Indemnity or fixed-benefit plans
Plans that do not meet Minimum Essential Coverage (MEC) requirements
Employees enrolled in these plans are not eligible for ICHRA reimbursements.
Do I need to stay enrolled in a qualifying plan every month?
Yes. To receive reimbursements:
You must be enrolled in qualifying coverage each month
Coverage must be active during the time the expense is incurred
Lapses in coverage make you ineligible for reimbursement for that period
If coverage changes, eligibility may pause until qualifying coverage resumes.
Can I use more than one plan to qualify?
Yes, but only qualifying coverage counts.
For example:
You may have both medical and dental coverage
Only the qualifying major medical plan satisfies ICHRA eligibility
Standalone dental, vision, or supplemental plans do not qualify on their own
What happens if my plan is not eligible?
If your coverage is not ICHRA-qualified:
You cannot receive reimbursements for premiums or medical expenses
Submitted claims will be denied
You must enroll in a qualifying plan to become eligible again
Eligibility resumes once qualifying coverage is active.
Does Marketplace enrollment automatically mean my plan qualifies?
Yes, if the plan is:
An ACA-compliant individual plan
Purchased through Healthcare.gov or a state exchange
However:
You must still maintain active enrollment
You cannot use subsidies if you are receiving ICHRA reimbursements