ICHRA Enrollment, New hires

Employee hired after the first day of the plan year:

Scenario 1: An employer offers all employees an ICHRA that starts on January 1, 2020. The ICHRA amount is $7,000 for the employees enrolled for all 12 months of the plan year. • The employer hires Tom on January 15, 2020, and he is eligible to enroll in the ICHRA with an effective date of the first day of the following month, February 1, 2020, as long as he enrolls in individual health insurance coverage that takes effect on or before February 1, 2020. He is offered a prorated amount of $6,416 based on the portion of the plan year during which he will be covered by the ICHRA. Like other employees, Tom’s ICHRA affordability will be based on the ICHRA’s monthly amount of $583.27 ($6,416/11 months of HRA eligibility). • He must select a plan by January 31, 2020 in order to ensure an individual health insurance coverage effective date of February 1, 2020. Alternatively, Tom has 60 days after his ICHRA could start to enroll in individual market coverage that will take effect the first of the following month. However, he should first confirm that his employer will permit his ICHRA to start later than February 1.

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