??? ICHRA - my day job has less than 50 Employees . . .

[myinsurebiz]

ICHRA - my day job has less than 50 Employees . . .

They are offering us an ICHRA using a TPA called ZizzlHealth which seems to use the Marketplace.

Using Zizzl for a specific plan - my Premium = $709 . That is after my Employer contribution of $870 per month.

If my employer didn't offer us an ICHRA and I went to the Marketplace and used my tax subsidy - my Premium for the same plan = $732.

What happened to the $870 my company paid each month?

Are there some tax deduction advantages for the Company that I'm not aware of -or- why did they do it?

 

[LeeV]

You are asking us why your employer offered you a plan. Best anyone here can do is guess. Suggest you ask the employer.

 

[myinsurebiz]

You are asking us why your employer offered you a plan. Best anyone here can do is guess. Suggest you ask the employer.

I'm asking do Employers get any tax breaks or incentives to offer an ICHRA since they seem to be paying a lot of $$ for the contributions when they could NOT offer it and the Employees can get a better deal by taking the Subsidy and using an Agent for the Marketplace.

 

[scagnt83]

You can opt-out of ICHRA and receive the tax credit instead.

To my knowledge, there is zero benefit to the employer if they have under 50 employees and no mandate to offer coverage.

However, hypothetically, it could cost them less than the mandatory 50% contribution to a Group Plan.

So for some situations, it allows them to "offer insurance" at a lower cost.

You could possibly negotiate with your employer to drop ICHRA and receive a cash bonus instead.

 

[LeeV]

I'm asking do Employers get any tax breaks or incentives to offer an ICHRA since they seem to be paying a lot of $$ for the contributions when they could NOT offer it and the Employees can get a better deal by taking the Subsidy and using an Agent for the Marketplace.

Yes, employers and employees receive tax advantages. The employer is allowed to deduct on federal. For the employee the value of coverage is not taxable to the employee and reimbursements are not taxable.

 

[Jim Wright]

You can opt-out of ICHRA and receive the tax credit instead.

If the contribution is affordable you cannot opt out and receive the tax credit.

To my knowledge, there is zero benefit to the employer if they have under 50 employees and no mandate to offer coverage.

If employees have high salaries, are younger and don't have families, often the tax benefit and lack of subsidy for those employees is a big benefit to the employer. It's not a common scenario but there are times that it makes sense to do it for groups that aren't ALEs

 

[myinsurebiz]

If the contribution is affordable you cannot opt out and receive the tax credit.

If employees have high salaries, are younger and don't have families, often the tax benefit and lack of subsidy for those employees is a big benefit to the employer. It's not a common scenario but there are times that it makes sense to do it for groups that aren't ALEs

ALEs ?

 

[Jim Wright]

ALEs ?

Sorry. Applicable Large Employer. aka a group that has 50 or more FTE (full time equivalent) employees.

 

[myinsurebiz]

An agent friend mentioned that there is not a specific $$ amount that an Employer has to offer Employees as a contribution to the ICHRA.

What if the Employer only offered everyone $50 a month? That would most certainly make the ICHRA unaffordable, the Employee could reject it and go through the Marketplace.

Do you know if that would break any rules?

 

[Jim Wright]

An agent friend mentioned that there is not a specific $$ amount that an Employer has to offer Employees as a contribution to the ICHRA.

What if the Employer only offered everyone $50 a month? That would most certainly make the ICHRA unaffordable, the Employee could reject it and go through the Marketplace.

Do you know if that would break any rules?

They can offer any dollar amount only if they are not an ALE. If they are an ALE, they are required to offer affordable coverage to at least 95% of employees. If they don't, they could get hit with IRS penalties