It’s March at Benafica, and our team is busy onboarding a new 60-person employer group with benefits set to go live on April 1. This kind of mid-year implementation is more common than you might think, but many employers still assume they have to wait until their annual renewal to make a change.
The reality is you don’t have to wait. Employers can implement an Individual Coverage HRA (ICHRA) at any point during the year, and many are making the switch when it makes the most sense for their business.
If you’ve been considering a change but thought you were stuck until renewal, here’s what you should know.
Quick ICHRA Overview
ICHRA stands for Individual Coverage Health Reimbursement Arrangement. It’s an alternative to traditional group health where instead of selecting a group health plan, you set up a monthly, tax-free allowance for your employees. They use that allowance to choose and purchase the individual health plan that works best for their needs, whether that’s based on doctors, prescriptions, or budget. Once enrolled, employees are reimbursed for premiums automatically through our platform.
Learn more about Benafica’s ICHRA offering
ICHRA Triggers a Special Enrollment Period for Employees
Offering employees an ICHRA mid-year triggers a Special Enrollment Period (SEP) of 60 days. This allows employees to enroll in individual health coverage outside of the standard open enrollment window, making a mid-year transition possible.
Let’s use our recent onboarding as an example. The employer contacted us early in the year to explore ICHRA. After reviewing a customized contribution strategy, they moved forward with Benafica as their administrator.
Even though this took place outside of the ACA’s standard Open Enrollment window (usually running from Nov 1st to Dec 15th for Jan 1st starts), offering an ICHRA opened the door for a Special Enrollment Period. Employees received their ICHRA notice, which allowed them to enroll in coverage right away.
To stay on track for the April 1 start date, we held open enrollment throughout March, with a cutoff about 10 days before the end of the month to complete everything in BEN360. That gave our enrollment team the time they needed to finalize applications with carriers and ensure coverage was active on day one.
With the right planning and support, a mid-year ICHRA rollout can move quickly while still giving employees the time and guidance they need to make confident decisions.
What Happens After a Mid-Year Start?
After a mid-year ICHRA launch, employers will need to shift to a calendar-year cycle. Yes, that can mean two open enrollments in your first year 😩. We know, it’s not ideal—but it sets you up for a smoother, more predictable cycle moving forward.
The reason comes down to how the ACA is structured: Individual rates are adjusted every year in the fall and start anew on Jan 1st of the next year, so you have a chance to readjust your contribution strategy before the start of each new year.
It’s also worth noting that renewing your ICHRA with the same administrator doesn’t trigger a Special Enrollment Period after the first year, so employees will need to change plans during the standard ACA Open Enrollment period if they wish to do so.
And while open enrollment can feel like a heavy lift, the right partner makes all the difference. Benafica helps manage the process from end to end, keeping communication clear, timelines on track, and employees supported every step of the way.