If you’re offering an ICHRA (Individual Coverage Health Reimbursement Arrangement), one compliance deadline you can’t afford to miss is the ICHRA 90-day notice. This required employee notice is one of the more overlooked pieces of ICHRA compliance. Getting it wrong (or getting it out late) can create real headaches for both you and your employees.
Here’s what the ICHRA notice requirement actually involves, what has to be included, and how Zorro takes the guesswork out of it.
What is the ICHRA 90-day notice?
The ICHRA 90-day notice is a federally required document that explains how your ICHRA employer plan works. When you prepare to switch to an ICHRA, you are required to send this notice to your employees.
It’s designed to make sure employees understand their benefits, their responsibilities, and their options, all with enough lead time to actually act on that information.
If you’re a Zorro client, we generate this notice for you automatically, so there’s no scrambling to draft one from scratch.
What has to be included in the ICHRA 90-day notice?
The ICHRA notice should cover several specific pieces of information including:
- Explanation of how ICHRA works: A plain-language overview that you, the employer, are reimbursing employees for the cost of individual health insurance.
- Allowance amount: How employees can find and view their monthly allowance.
- Eligibility details: Who qualifies for the ICHRA. This can vary by employment type, full-time vs. part-time status, or other employee classes.
- Enrollment instructions: A reminder that employees must enroll in individual health insurance in order to participate and get reimbursed.
- Opt-out information: How employees can decline the ICHRA if they’d rather not participate, and what that process looks like.
- Premium tax credit impact: An explanation of how accepting the ICHRA affects eligibility for premium tax credits on the Health Insurance Marketplace, including how affordability is calculated.
- Qualifying Life Event (QLE) information: A note that employees who gain or lose ICHRA eligibility mid-year can make corresponding changes to their individual coverage.
When does the ICHRA 90-day notice need to be sent to employees?
Timing is (obviously) key to this notice, so it’s worth getting right:
- For existing employees: The notice must go out at least 90 days before the start of each new ICHRA plan year.
- For newly eligible employees: Under federal regulations, employees who become eligible mid-year (think new hires or current employees with a QLE), must generally be notified before the date coverage takes effect. However, if an employee becomes eligible too close to their start date, federal rules technically allow providing the notice as late as the effective date of coverage.
Why do employers need to provide an ICHRA 90-day notice?
Beyond the fact that employers are legally required to provide the notice, it does play an important role in the benefits enrollment process.
Individual health insurance shopping takes time, and employees need to understand upfront how their allowance affects their Marketplace options. A late or incomplete notice can leave employees confused about their benefit or, worse, cause them to miss their enrollment window entirely.
How does Zorro make ICHRA notice compliance simple?
Rather than making your team track plan year start dates, new hire eligibility dates, and notice content requirements manually, Zorro handles the 90-day notice for you.
Our team builds and delivers your ICHRA 90-day notice automatically, which is accessible anytime in the admin and employee portals. It’s one less compliance deadline for your team to keep track of.
Have a question about ICHRA notices? If you’re using Zorro, reach out to your Customer Success Manager to learn more about how your notices are generated and delivered.
