BASE^® Blog

Since January of 2020, the NEW Individual Coverage Health Reimbursement Arrangement (ICHRA) has opened the doors, helping business owners of all sizes, implement a more predictable benefits solution.

The BASE® Individual Coverage Health Reimbursement Arrangement (ICHRA) is a tax-advantaged health benefit used to reimburse employees for personal health care expenses, such as individual health insurance premiums and out-of-pocket medical expenses.  It provides a health benefit to better fit the needs of many businesses, regardless of size.

With over 800,000 individuals looking to benefit from the ICHRA by 2024, there is much excitement about it’s potential, but with that excitement comes new questions.

The Affordable Care Act (ACA) introduced Applicable Large Employers (ALEs), which is any company or organization that has an average of at least 50 full-time employees or "Full-Time Equivalents" or "FTEs." For the purposes of the Affordable Care Act, a full-time employee is someone who works at least 30 hours a week.  ALEs have specific requirements they must follow under the ACA.  Most ALE employers are familiar with the 1094/1095 tax form reporting required.

Recently, a question was posed to BASE® - “Do Non-ALE employers (those with less than 50 full-time equivalents) need to file the 1094-B and 1095-B if they sponsor the ICHRA?”

The answer is YES.  Health insurance issuers, carriers, Marketplaces, and government programs typically file to report coverages.  However, because the ICHRA is considered a “self-funded” plan offered by the employer for health coverages, it is the plan sponsor’s responsibility to report coverage for each participant.

Employers, regardless of size, who sponsor an ICHRA plan must complete ACA reporting.  The size of the employer’s organization determines which forms should be completed and filed:

• Non-ALE (less than 50 FTEs) – Forms 1094-B and 1095-B need to be completed and filed. 
• ALE employers (50 or more FTEs) – Forms 1094-C and 1095-C should be used.

All forms for 2020 have been modified to add new codes for reporting offers of Individual Coverage HRAs and new lines for reporting required information.  In addition, employers must distribute copies of the Form 1095 either B or C to plan participants. If you have clients enrolled in the BASE® ICHRA, they have received communication from us regarding this information and we recommended working with their tax professional to ensure proper filing with the IRS.

For the ICHRA to be in compliance, employees must first enroll in individual coverage that includes individual policies, student health coverage, and Medicare Part A, B, C premiums.  Individual coverage does not include coverage under a spouse’s group health plan, short-term or limited-duration policies, or health care sharing ministries.  Once eligible coverage is obtained, the employee can submit qualifying premiums and, in some plan designs, Section 213(d) medical expenses for reimbursement. 

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As a new year begins, BASE® is proud to continue a long-standing tradition of being committed to service.  While our industry continues to evolve, BASE® continues to provide more options for employers to help control the rising cost of health benefits and mitigate the risk associated with continually changing rules and regulations.

As we look back on 2020, BASE® introduced two new HRAs with the Individual Coverage HRA (ICHRA) and Excepted Benefit HRA (EBHRA).  We also saw new rules and regulations introduced with legislation and IRS action in the way of the CARES Act, Further Consolidated Appropriations Act, IRS Notice 2020-29 and Notice 2020-33. Many of the rules and regulations introduced required amendments to tax-advantaged plans and compliance services offered and we delivered timely updates to our clients.

BASE® also continued to focus on providing the best customer experience possible by continuing to update the technology for our BASE® Benefits suite of products and services.  We continue to listen to our clients to enhance our technology and provide improved solutions to deliver even greater capabilities and deeper security.

With a one-stop solution providing a single web portal for multiple accounts to coordinate benefits, such as an ICHRA and FSA, all on one single platform, BASE® delivers increased flexibility and efficiency to meet the growing needs of our clients.  Our capabilities include easy-to-use, secure self-service portals with online forms, robust reports, increased substantiation with our prepaid benefits card and best in class mobile applications.

With BASE^®, employers and employees can experience…

• Providing excellent sales and service staff, innovating products and services, and most importantly, listening to clients in an unwavering commitment to provide the best benefit programs the industry has to offer.
• Ongoing responsibility to be vigilant and committed to the compliance surrounding the BASE® Suite of products. 
• Customer Service. Customer service is a priority and made available with one-on-one contact with each client.
• Continually diversifying and expanding products and services in an ever-changing market to recognize, customize, and meet the needs of our clients, while providing value.

BASE^® is truly committed to offering benefits you can trust and service you can count on.  We will continue to expand to encompass employer’s needs, and as many of our clients already have, we invite you to experience the BASE^® difference!  For more information, call BASE^® at 1-888-386-9680.

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