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Compliance Corner

Federal Updates

CMS Publishes 2022 ICHRA Employer LCSP Premium Look-up Table

November 09, 2021

An Individual Coverage Health Reimbursement Arrangement (ICHRA) is a type of HRA that allows employees to be reimbursed for an individual coverage premium, up to a maximum dollar amount that the employer makes available each year. In order to be eligible, an employee must be enrolled in individual health insurance coverage or Medicare Part A, B, or C; and an employer cannot offer a traditional health plan and ICHRA to the same class of employees.

CMS recently released the Plan Year 2022 ICHRA Employer Lowest Cost Silver Plan (LCSP) Premium Look-up Table to help ALEs determine whether their ICHRA offers are considered affordable under the employer mandate provisions. This information will also help determine if the employee is eligible for a Premium Tax Credit in the Marketplace (a.k.a., Exchange).

If an ALE offers ICHRAs to at least 95% of its full-time employees (and their dependents), the ALE will not be liable for the employer mandate’s Penalty A, which is a more severe penalty than the employer mandate’s Penalty B (References: Executive Order 13813 and IRS Notice 2018-88).

ALEs who sponsor ICHRAs can use this LCSP Premium Look-up Table to evaluate if the employer’s contribution to ICHRAs for each employee is considered affordable under the employer mandate. Under the safe harbor rule, an employer may use the lowest cost silver plan for employee-only coverage offered through the marketplace where the employee's primary site of employment is located for determining whether an offer of an individual coverage HRA to a full-time employee is affordable, instead of the lowest cost silver plan for the employee in which the employee resides.

The ICHRA Employer LCSP Premium Look-up Table contains LCSP individual market rates based on an eligible enrollee’s age and geographic location. The LCSP is the least expensive individual silver qualified health plan in a geographic area at the lowest age band. (Note: The ICHRA Employer LCSP Premium Look-up Table does not contain data from states with State-based Exchanges (SBEs) that do not use HealthCare.gov.)

For more information regarding ICHRAs, see the article published in the June 25, 2019, edition of Compliance Corner.

Employers who offer or are considering offering ICHRAs should be aware of this development.

CMS ICHRA Employer LCSP Premium Look-up Table »
IRS Application of the Employer Shared Responsibility Provisions and Certain Nondiscrimination Rules to Health Reimbursement Arrangements and Other Account-Based Group Health Plans Integrated With Individual Health Insurance Coverage or Medicare »

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