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Balancing Act: Can Employers Offer Both ICHRA and Group Health Insurance?

As an employer, you may be exploring your options for providing healthcare benefits to your team. If you’re considering the Individual Coverage Health Reimbursement Arrangement (ICHRA) but still want to offer group health insurance, you might be wondering if it’s possible to have the best of both worlds. In this blog post, we’ll help you navigate the ins and outs of offering both ICHRA and group health insurance. If you’re new to ICHRA, check out our previous blog post, What is ICHRA and how does it work?

Ready to dive in? Let’s explore the rules and regulations surrounding offering both ICHRA and group health insurance.

The Short Answer: Yes, But With Some Caveats

In short, employers can offer both ICHRA and group health insurance. However, there are specific rules and regulations in place to ensure that employees are not “double-dipping” and taking advantage of both options simultaneously.

Employee Classes: The Key to Offering Both Options

The key to offering both ICHRA and group health insurance lies in creating separate employee classes. Employers must ensure that the employees within a specific class can only access one type of benefit – either ICHRA or group health insurance. For example, you might offer ICHRA to your part-time employees and group health insurance to your full-time employees.

Playing by the Rules

To remain compliant when offering both ICHRA and group health insurance, employers must adhere to the following rules:

– Non-Discrimination: Employers cannot discriminate against employees based on health factors when creating employee classes or determining eligibility for ICHRA or group health insurance.

– Minimum Class Size: When offering both options, employers may need to satisfy a minimum class size requirement for certain employee classes, such as salaried or hourly employees.

– Opt-out Period: Employees who are eligible for ICHRA must be given an opportunity to opt out of the arrangement at least once per year.

So in conclusion, yes, employers can offer both ICHRA and group health insurance, But it’s crucial to ensure that the two options are offered to distinct employee classes and that all applicable rules and regulations are followed. By offering both options, you can provide your employees with a flexible and personalized approach to healthcare benefits that cater to their diverse needs.

As always, it’s a good idea to consult with a qualified benefits consultant when setting up your healthcare benefit options to ensure you’re making the best decisions for your organization and remaining compliant.

Talk to a licensed benefits expert at Remodel Health and see if our ICHRA products are a good fit for your organization!

Important Notice:  Remodel Health does not intend to provide specific insurance, legal, or tax advice. Remodel Health always recommends consulting with your own professional representation to properly evaluate the information presented and its appropriate application to your particular situation.