The Centers for Medicare and Medicaid Services (CMS) has published Marketplace premium lookup tables (along with a guide) for employers to determine the lowest cost silver plan in a geographic area utilizing a federal Exchange platform (including state partnerships that utilize the federal platform). This enables employers to determine whether their offer of an individual coverage health reimbursement arrangement (ICHRA) is an affordable offer of coverage.
An ICHRA is a way employers could offer a certain amount of typically non-taxable money to employees for purchasing their own individual market health plan. While it still creates a group health plan with several employer requirements, it’s more of a defined contribution approach to benefits rather than the employer sponsoring a comprehensive medical plan through a health insurer or third party administrator. Applicable large employers (ALEs) can offer their employees working 30+ hours per week with an ICHRA to satisfy their employer shared responsibility mandate under §4980H(a), and if the lowest cost silver plan after accounting for ICHRA funds would not cost the employee more than an available affordability safe harbor allows, the ALE’s ICHRA offer could even be deemed affordable enough to avoid penalty under §4980H(b).
Note there are many rules around sponsoring an ICHRA, including the limitation that an employer cannot offer an ICHRA to a class of employees eligible for the employer’s group health plan, and there are significant restrictions to the allowable classes for which the employer can differentiate offering an ICHRA to some and group health plan to others.
Let your IMA Benefits team know if you have any questions. IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.