1. When can I start an ICHRA?
The great thing about ICHRA is that you can start it anytime during the year. There is a required 90-day notice period, so it requires a little bit of pre-planning. Mid-year starts are common when replacing a group plan or offering benefits for the first time.
For example, if you contacted Benafica in February, we could begin your financial modeling that same month — reviewing contribution strategies, selecting a benchmark plan, determining your budget, and finalizing your plan design. Once those decisions are finalized, we will help you prepare and deliver the 90-day employee notice and set up your onboarding timeline.
Here’s what that might look like:
- February: Complete your financial analysis and finalize your ICHRA plan design
- Early March: Employees receive their 90-day ICHRA notice
- June: Employee Open Enrollment
- July 1st: ICHRA benefits go live
2. What if my employees are already enrolled in plans? Do my employees qualify for a Special Enrollment Period (SEP) when I start an ICHRA?
Yes. Offering ICHRA triggers a Marketplace Special Enrollment Period (SEP) for all eligible employees. So even if they’re already enrolled in a group plan you previously offered, or in an individual plan through the Marketplace, they’ll have a new opportunity to take advantage of your ICHRA coverage and enroll in a new plan or change their coverage.
3. Do I need to cancel my group plan?
Typically, yes. Employees can’t be offered both a group plan and an ICHRA allowance. You can offer a group plan and ICHRA to separate employee classes (See Question 4 for more on that).
Refer to your Summary Plan Documents (SPDs) for more information on what steps to take to terminate your group coverage mid-year, if that’s an option. There may be notice periods involved.
4. Can I offer both an ICHRA and a traditional group plan at the same time?
Yes, but only if you use the permitted 11 employee classes. For example, you may offer group coverage to one class (full-time employees) while offering ICHRA to another (part-time employees). Mixing within the same class is not allowed.
5. Are there minimum participation requirements for an ICHRA?
Nope. That’s part of the beauty of ICHRA… An employer may offer an ICHRA even if only one employee enrolls, or if some employees waive coverage entirely. This is a key distinction from traditional group health insurance, where carriers typically impose minimum participation or minimum employer contribution rules.
That said, while there’s no legal minimum participation requirement, it may not always be cost-effective to offer an ICHRA to just one employee, since administrative fees and setup costs could outweigh the benefits. Some ICHRA administrators do have their own headcount minimums for practical reasons, so it’s worth checking with your platform or broker before launching the plan.
6. How much should I reimburse, and are there minimum or maximum contribution rules?
How much you choose to contribute towards your employees’ allowance largely depends on your company size and budget. If you’re an Applicable Large Employer (ALE), you will have to meet minimum affordability standards to avoid any employer shared-responsibility penalties. As a smaller employer, you can contribute however little or as much as you want — even $100 per person.
You can choose to contribute a flat-rate amount (e.g. $500) or adjust amounts based on age and location. An age-based strategy is more equitable across your workforce, because it takes into account how healthcare premiums vary based on your age and location. With an age-based strategy, we will pull local premium amounts for your employees and forecast a percentage match of a plan and tier. Read our blogs on ICHRA contribution strategies and how the ACA defines affordability for the employee’s portion of the healthcare premium.
7. What types of expenses can an ICHRA reimburse?
Most commonly, employers set up their ICHRA to reimburse health insurance premiums only. However, you can elect to cover both premiums and allocate any leftover money towards qualified health expenses. If you decide to set up your ICHRA this way, premiums will be paid with ICHRA dollars first, and anything leftover can go towards reimbursing an employee for their out-of-pocket medical expenses like copays or prescription drugs. Employers may choose “premium-only” or “premium + medical expenses.”
8. Is an ICHRA compliant with ACA employer mandate rules?
Yes. An ICHRA satisfies the employer mandate for Applicable Large Employers if contributions are “affordable” according to IRS safe-harbor calculations and employees enroll in an ACA-compliant individual plan. Benafica’s BEN360 platform exclusively offers off-market, ACA-compliant plans, so you’ll never have to worry about that.
9. What administrative support do I need to run an ICHRA?
Most employers work with an ICHRA administrator to manage enrollment, compliance, notices, documentation, reimbursement workflows, and support.
The biggest change when switching to an ICHRA is helping employees choose a healthcare plan. Instead of one or two company-selected options, employees can pick from dozens of plans in their local market. Benafica supports this with step-by-step videos, how-to guides, and a dedicated counselor employees can schedule time with for personalized guidance.
Once open enrollment is tackled, your ICHRA administrator continues to help you keep things running smoothly in the background, dealing with things like monthly premium payment processing, health expense reimbursement (if applicable), qualifying life events, and employee support, year-round.
Bonus Question:How do I choose an ICHRA administrator?
Choosing the right ICHRA administrator is one of the most important decisions an employer can make when transitioning to individualized health benefits. When choosing an ICHRA administrator, look for three key things: expertise in HRA compliance, responsive support, and technology that actually makes the process easier.
At Benafica, we believe the best ICHRA administration blends trusted expertise with a human-centered approach. That means real people who understand your goals, your employees, and the complexities of the health insurance landscape. You’re never left navigating enrollment, compliance, or reimbursements alone — we’re here to guide you every step of the way.
Learn more about Benafica’s ICHRA.
Learn more about our ICHRA platform, BEN360.