Group Health Plan Alternative: Reimburse Health Insurance Premium

Employers and employees might be in for a change when it comes to Health insurance starting in 2020. According to the Natlawreview beginning in 2020, subject to the satisfaction of several requirements, employers may offer employer payment plans as an alternative to traditional group health insurance plans viable option for you?

With the final regulations slated to start in 2020 allow employers to offer employees accounts that reimburse the individuals for their health insurance premiums. In order to be able to offer this alternative, multiple conditions must be met.

The conditions:

The participant and any dependents must actually be enrolled in qualifying individual coverage for each month the individuals are covered by the ICHRA.
The employer may not offer a traditional group health plan to the same participants covered by the ICHRA for the same plan year. A traditional group health plan is any group health plan other than an account-based group health plan or a plan consisting solely of excepted benefits.
If an employer offers an ICHRA to a class of employees, all employees in that class must receive the same terms for the ICHRA, subject to specific exceptions. These exceptions include permitted variation in the benefit because of the number of dependents and age of the participant. That said, the maximum dollar amount provided to the oldest participant may not exceed three times the maximum available to the youngest participant. Special rules apply to new hires and there may be a variation related to HSA and non-HSA compatible ICHRAs.
Otherwise eligible participants must be able to opt-out of the ICHRA annually.
The ICHRA must implement and comply with reasonable procedures to confirm that participants and dependents have coverage under the ICHRA. To accomplish this, the employer may require that a participant provide either a document from a third-party showing coverage or an attestation to having other coverage. The DOL created a model “Attestation” for employers to use. And after the initial substantiation, the participant must confirm coverage with each reimbursement.
The employer must provide certain information about the ICHRA in a written notice to each participant, generally at least 90 days before the plan year begins. The employer may use the model notice provided in the regulations for this purpose.

Employee Plans Offered In Levels

Employers won’t be able to offer employees of the “same” level both an ICHRA and a traditional group health plan. However, they may offer one or more classes of employees an ICHRA and another class(es) a traditional group health plan. These classes include:

Full-time employees.
Part-time employees.
Employees paid on a salaried basis.
Those paid on an hourly basis.
Employees whose primary site of employment is in the same rating area.
Seasonal employees.
Employees covered by a particular collective bargaining agreement.
Employees who have not satisfied a waiting period.
Non-resident aliens with no U.S. source income.
Employees who are employees of a staffing agency.
A combination of the foregoing.

Group Health Plan Or Reimbursement?

There will also be final regulations to help prevent discriminations. Some of the regulations include class size requirements based on full or part-time, salary vs hourly, location and more.

2020 will be an exciting year allowing both employers and employees to have more options with their insurance. If interested, you must provide ICHRA a change notice at least 90 days before the new plan year.

Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions.  If you have any questions, comment below and your question may be the topic of our next post!

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