An individual coverage health reimbursement arrangement (ICHRA) is an employer-sponsored benefit that allows organizations to provide tax-free contributions employees can use toward individual health insurance premiums and eligible medical expenses. Unlike traditional group health plans, ICHRA gives employees more flexibility to choose coverage that fits their needs.

Is ICHRA only for small employers?

No. Employers of all sizes use ICHRA to provide flexible health benefits.

Do employees have fewer health plan options with ICHRA?

No. ICHRA often gives employees access to a wider range of individual health plans. Instead of choosing from a limited number of employer-selected group plans, employees can compare available options and select healthcare coverage based on their providers, prescriptions, budget, and healthcare needs.

Can an employer switch ICHRA administrators midyear?

Yes. Employers can transition administrators midyear. However, switching administrators doesn't trigger a special enrollment period (SEP) for employees.

What information do I need from my current ICHRA administrator when changing partners?

Employers should request a complete enrollment file, including employee and dependent details, plan IDs, member IDs, contribution amounts, and payment information.

How long does an ICHRA administrator transition take?

The timeline depends on the size of the group, carrier processes, available data, and whether employees are making plan changes. A strong transition partner will help create a clear timeline and guide employers through each step.

Will switching ICHRA administrators affect my employees’ health plans?

It depends on the timing of an ICHRA vendor change. If you’re exploring a midyear change, employees’ plans won’t be impacted, as changing ICHRA vendors doesn’t create an SEP. However, changing vendors during the annual Open Enrollment period would allow employees to change their plans for the new benefit year.

What should I look for in an ICHRA administrator?

You should look beyond tech-only ICHRA platforms and evaluate vendors based on their customer service model, compliance support, and change management.

What is the difference between Medicaid and CHIP?

Medicaid provides health coverage for eligible low-income individuals and families, including adults, children, pregnant individuals, seniors, and people with disabilities. In contrast, CHIP is primarily for children and certain pregnant individuals whose household income is too high to qualify for Medicaid but too low to comfortably afford private health insurance.

Can you have Medicaid and private health insurance at the same time?

Yes. In some situations, individuals can have Medicaid and another form of health insurance simultaneously. When this happens, Medicaid may help pay for certain medical costs the primary insurance plan doesn’t cover. However, coordination of benefits rules may vary depending on the type of private coverage the individual has and their state requirements.

What income levels qualify for Medicaid?

Medicaid income limits vary by state, household size, and eligibility category. Most states use modified adjusted gross income (MAGI) to determine eligibility for children, parents, and many adults. In states with Medicaid expansion due to the Affordable Care Act (ACA), adults with household incomes up to 138% of the federal poverty level may qualify.

Can adults qualify for CHIP?

CHIP is primarily for children younger than age 19. However, some states allow certain pregnant individuals to qualify for CHIP coverage.

Can employees with Medicaid participate in an ICHRA?

No. While Medicaid counts as minimum essential coverage (MEC), the federal government doesn’t consider it qualifying individual health insurance, which is necessary to participate in an ICHRA. Employees must enroll in an eligible individual health plan to use their ICHRA benefit.

Does an ICHRA affect CHIP eligibility?

It can. A child's eligibility for CHIP may depend on whether the employee's ICHRA meets affordability standards. Because CHIP rules differ by state, employees should contact their state's Marketplace or Medicaid agency to determine how an ICHRA offer affects their family's eligibility.