An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded health benefit that reimburses employees for eligible medical insurance premiums and qualified healthcare expenses. Unlike traditional group health insurance, an ICHRA allows employees to choose their own individual health insurance plan that best fits their needs. Employers set a fixed allowance for reimbursements, giving employees greater flexibility and control over their healthcare choices.
At Salusion, we’ve designed a simple and streamlined onboarding process to help you enroll in your ICHRA. Our step-by-step system ensures that you can easily confirm your eligibility, provide insurance details, and set up your reimbursement method. This guide walks you through each step so you know exactly what to expect.
Step 1: Enrollment Invitation
Once your employer offers you an ICHRA, you will receive an email invitation from Salusion with a link to begin your onboarding. Click the "Enroll" button to get started.
Step 2: Acknowledging Your ICHRA Documents
Before proceeding, you must acknowledge that you have received the necessary ICHRA documents. These documents provide key details about your health reimbursement benefit and ensure you understand how your ICHRA works.
- ICHRA Summary Plan Description (SPD): This document outlines the structure of your ICHRA, including eligibility requirements, covered expenses, reimbursement rules, and how to access your benefits. It serves as a comprehensive guide to help you navigate your ICHRA.
- ICHRA Appendix A: This is a supplement to the SPD that contains specific details about your plan, including the most important component—the benefit amount. It also provides additional information on plan provisions, specific terms, conditions, and any legal or compliance-related aspects of the ICHRA.
- ICHRA Employee Notice: This legally required notice informs you about your ICHRA, how it interacts with premium tax credits, and what steps you need to take to maintain coverage. The most critical aspect of this document is that it may open a special enrollment period on the Health Insurance Marketplace, allowing you to purchase an individual insurance plan if needed.
To proceed with enrollment, you must check the box to confirm receipt of these documents and move forward.
Step 3: Confirming ICHRA Eligibility
Before proceeding, we need to verify your eligibility for the ICHRA. You will be asked what type of health insurance coverage you will have for the plan year.
- If you select Individual Coverage (Marketplace or Non-Marketplace) or Medicare, you meet the eligibility requirements and can continue with enrollment.
- If you have a different type of coverage, such as a spouse’s group plan, COBRA, TRICARE, or other non-eligible coverage, you will not be able to participate in the ICHRA at this time.
If your situation changes and you obtain eligible individual coverage or Medicare at a later date, you will have the opportunity to return and complete your enrollment.
Step 4: Understanding the Impact on Premium Tax Credits
If you purchase health insurance through the Marketplace, you may qualify for premium tax credits (PTCs) to help lower the cost of your monthly premiums. However, enrolling in an ICHRA may affect your eligibility for these credits.
- If your ICHRA is considered affordable based on IRS guidelines, or if you accept the ICHRA regardless of affordability, you will not be eligible to receive premium tax credits.
- If your ICHRA is unaffordable, meaning the employer-provided benefit does not meet affordability standards based on your household income, you have the option to decline the ICHRA. By opting out, you can retain your eligibility for premium tax credits to help reduce the cost of your Marketplace plan.
What Does It Mean for an ICHRA to Be Affordable?
An ICHRA is considered affordable if the employee’s required contribution (the lowest-cost silver-level plan on the Marketplace minus the employer’s self-only ICHRA contribution) does not exceed a 9.02% of their household income. This percentage is set annually by the IRS.
To assist in your decision, you will have the opportunity to check affordability by entering your estimated household income. The system will calculate whether your ICHRA allowance meets affordability requirements, allowing you to make an informed choice about whether to accept or decline the benefit.
Step 5: Accept or Decline Your ICHRA Benefit
At this stage, you will need to decide whether to accept or decline your ICHRA benefit. Your decision will impact your ability to receive premium tax credits if you purchase insurance through Marketplace.
- Accept Your ICHRA: If you choose to accept the ICHRA benefit, you will move forward with enrollment and receive reimbursements for eligible health insurance premiums and medical expenses based on the allowance set by your employer.
- Opt-Out of Your ICHRA: If your ICHRA is unaffordable and the premium tax credits you would receive from the Marketplace are greater than your ICHRA benefit, you may choose to opt out. By doing so, you remain eligible for premium tax credits.
If you accept the ICHRA, you will proceed with creating your Salusion account by setting a password.
Step 6: Providing Medical Insurance Details
To participate in an ICHRA, you must show proof of insurance to confirm that you have eligible coverage. This section ensures that you, and any covered dependents, meet the requirements to receive reimbursements through the ICHRA.
Once you’ve confirmed your coverage, you’ll go through the following steps:
A. Insurance Status
Confirm that you have Individual Coverage or Medicare for any part of the plan year. If you do not have eligible coverage, we will provide links to Marketplace and off-Marketplace options to help you obtain a plan.
B. Adding Spouse & Dependents
If any spouses or dependents are covered under your plan, you’ll need to list them to ensure they are properly accounted for under your ICHRA.
C. Providing Insurance Details & Proof of Coverage
To verify coverage, you must provide details about your insurance provider and upload proof of insurance. If any family members are covered under separate insurance policies, you will need to supply details and proof for those policies as well.
To provide proof, you can use:
- A monthly bill from your insurer
- A confirmation email or document from your provider
- A screenshot of your health insurance portal showing active coverage
D. Covered Individuals & Dates
Indicate the earliest month of coverage for each insured individual. This date determines when your ICHRA plan year starts, ensuring reimbursements align with your coverage period.
Step 7: Setting Up Your Reimbursement Method
To receive reimbursements, you’ll need to enter your bank details, including:
- Routing number
- Account number
- Bank name
Once you’ve submitted your bank information, you’ll see a confirmation message that your onboarding is complete. You can now access your Salusion dashboard to submit expenses and manage your reimbursements.
