Adding New Hires
New hires must receive their official ICHRA notice on or before their first day of eligibility. Receiving this notice is a qualifying life event, triggering a personal 60-day Special Enrollment Period (SEP) for the employee to shop the individual market. In a modern tech stack, the TPA typically automates the generation and distribution of these notices.
Removing Terminated Employees
When an employee leaves the company, the employer must notify the TPA immediately to cease monthly reimbursements. Because the employee actually owns their individual health plan, they do not lose their insurance; they simply lose the employer's financial contribution and must take over paying the full premium themselves.
Yearly Renewal
Market Review & Design Adjustments
While ICHRAs eliminate the traditional "Renewal Heart Attack," they still require proactive annual strategy. About 120 days before the new plan year, the agent should re-run the Quoting Platform to analyze how local individual market rates have shifted. You will use this data to adjust the employer's class contribution levels, ensuring the plan maintains ACA "Affordability" based on the newly updated IRS thresholds.
Re-Enrollment & Attestation
Employees do not necessarily need to change their underlying health plans during Open Enrollment, but they must actively re-attest to having Minimum Essential Coverage (MEC) for the upcoming year to keep receiving tax-free funds.
The TPA handles the heavy lifting of open enrollment by automatically collecting the mandatory annual MEC attestations, distributing the new year's 90-Day Notices, and resetting the auto-pay and reimbursement ledgers for January 1st.
Embracing the Defined Contribution Future
The Individual Coverage Health Reimbursement Arrangement (ICHRA) represents a fundamental modernization of employer-sponsored health benefits. It moves the conversation away from the historical volatility and administrative burden of a single group plan and toward a defined contribution model rooted in predictability, compliance, and individual choice.
By following this quick-start guide, agents can strategically position ICHRA as the ideal solution for clients navigating network deserts, managing high-risk claims, or seeking precise budget control. Success relies on a combination of:
- Strategic plan design — utilizing employee classes and age-based variations
- Meticulous compliance with ACA affordability and ERISA rules
- Deployment of a robust TPA and quoting tech stack