ICHRA - An Overview and Reporting Requirements on ACA Forms

ICHRA - An overview

New regulations regarding ICHRAs have been introduced in 2020 and these plans are now emerging among employers.

An ICHRA is an employer-sponsored reimbursement plan, which allows employees to purchase their individual health insurance plan on the market place. In turn, the plan reimburses the employee upto their allowance amount to help them cover a portion of their medical costs
and/or premiums.

You can define eligibility according to the employee classes listed below. It can be a different allowance amount for different classes
of employees, including:

Full-Time employees

Full-Time employees

Part-time employees

Part-time employees

Seasonal employees

Seasonal employees

 Salaried employees

Salaried employees

Non-salaried employees

Non-salaried employees

Hourly employees

Hourly employees

Temporary employees who are working for a staffing firm

Temporary employees who are working for a staffing firm

 Employees those covered by a collective bargaining agreement

Employees those covered by a collective bargaining agreement

Employees those in a waiting period

Employees those in a waiting period

NRI employees those work in abroad

NRI employees those work in abroad

Employees from different locations

Employees from different locations, depending on
rating areas

A blend of two or more of the above

A blend of two or more of the above

ICHRA Affordability

According to the ACA employer mandate, Applicable Large Employers (ALE) reimbursing for the ICHRA plan should be affordable for
each employee.

ICHRA is considered to be affordable, if the remaining amount an employee has to pay for the lowest-cost silver plan on the local exchange must not be more than 9.83% of the employee’s household income. (rate applies to
tax year 2021)

Click here to calculate the ICHRA affordability.

ICHRA Reporting Requirements

According to the ACA reporting requirements, employers are responsible for reporting the ICHRA Information to the IRS and furnishing the copies
to employees.

For reporting, the IRS requests employers to submit the ICHRA information on ACA Form 1095-B / 1095-C.

To gather the ICHRA plans information and to ensure the affordability for employees, the IRS has added new lines & codes to the Form 1095-B/C.

Reporting ICHRA on Form 1095-C

IRS added the few lines and codes on Form 1095-C to gather ICHRA information.

  • Employee’s age on January 1
  • Plan Start month
  • Zip code by month (Line 17)
  • There are now eight new codes (1L - 1S) in Line 14 to report the method they used to determine the affordability of ICHRA Coverage.

Click here to know more about the 2021 ACA Reporting Requirements.

Reporting ICHRA on Form 1095-B

On the Form 1095-B, employers offering an ICHRA must report enrollment on line 8 of the form

Meet your ICHRA Reporting Requirements with our Software

Choosing ACAwise, we help you to generate the ICHRA codes and e-file your ACA Forms with the IRS, State and distribute the 1095 copies to your employees on-time. We provide two different reporting services for you to choose from,
based upon your requirements.

Interested in Reporting ICHRA using our Software?

Send us your requirements to support@acawise.com or give us a call at (704)-954-8420.

You can Sign Up Now and add your basic business details to begin your ACA Reporting.

You can define eligibility according to the employee classes listed below. It can be a different allowance amount for different classes
of employees, including:

One of our ACA Representatives will contact you with a free consultation and quote.