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ICHRA: Which health insurance plans qualify for reimbursement

This article is for employees enrolled in an Individual Coverage Health Reimbursement Arrangement (ICHRA) through Take Command Health who need to determine whether their health insurance plan qualifies for premium reimbursement.

Written by Ryan H

Employees enrolled in an ICHRA through Take Command Health can be reimbursed only for premiums from ACA-compliant individual health insurance plans, Medicare coverage, catastrophic plans (if eligible), and student health insurance.

What health insurance plans qualify for an ICHRA?

ICHRA only allows reimbursement for qualified individual health insurance coverage that meets federal ACA and IRS requirements.

Eligible plan types include:

  • Major medical individual health insurance plans

    • Purchased on Healthcare.gov (Marketplace)

    • Purchased off the Marketplace (private individual market plans)

    • Bronze, Silver, Gold, or Platinum ACA-compliant plans

  • Medicare coverage

    • Medicare Part A and B together, or Medicare Part C (Advantage)

  • Catastrophic health plans

    • Available only if you are under 30 or qualify for a hardship exemption

  • Student health insurance plans

    • School-sponsored individual coverage that meets eligibility requirements

Note: On Medicare, specifically you must have parts A+B or C (Medicare Advantage) to qualify, but as long as you have either of those, all Medicare supplements are reimbursable.

The following chart explains which plans are allowed with ICHRA

What health insurance plans do NOT qualify for ICHRA?

The following plans are explicitly not eligible for reimbursement under ICHRA:

  • Employer-sponsored group health plans (including spouse’s plan)

  • Medicaid

  • TRICARE

  • Short-term health insurance plans

  • Health care sharing ministry plans

  • Indemnity-only plans

  • Preventive-only MEC plans without full coverage

What health insurance plans do NOT qualify for ICHRA?

The Individual Coverage HRA requires employees and their dependents to be enrolled in individual health insurance for each month the employee and their family members are reimbursed through ICHRA. In order to be qualified individual coverage, it must meet the minimum requirements as outlined in Public Health Services (PHS) Act Section 2711 and Section 2713. Additionally, expenses must be incurred while an individual’s insurance plan is active. ICHRA does not allow reimbursement for premiums or expenses incurred prior to the insurance coverage start date or before the ICHRA plan activation.

These two provisions require that the employee's plan has:

  • No annual or lifetime limits on the dollar amount for coverage of essential health benefits

  • Full coverage of preventative health services to be covered with no shared cost to the insured

  • Plan compliance verification, ensuring the health plan aligns with ICHRA eligibility, including proof of ACA compliance or individual plan requirements.

In other words, the plan needs to meet Minimum Essential Coverage through an individual marketplace plan.

Eligible and Ineligible Plans: Quick Reference

Eligible for ICHRA reimbursement:

  • ICHRA monthly allowances can be used for reimbursing individual premiums and qualified medical expenses for employees and dependents, subject to the reimbursement structure set by the employer.

  • Reimbursements are conditional upon proof of enrollment in eligible health plans, with allowable expenditures regulated by ICHRA policy and timing.

Not eligible for ICHRA reimbursement

The following plans do not qualify:

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