ICHRA Eligibility: Who Qualifies and What You Need to Know
One of the most common questions: "Who qualifies for ICHRA?" The answer is broader than you might think.
Employer Eligibility
Virtually any employer can offer ICHRA. No restrictions based on company size, industry, business structure, or location. The only rule: you cannot offer group insurance and ICHRA to the same class of employees.
Employee Eligibility
Must Have Individual Coverage
Employees must have individual health insurance that meets minimum essential coverage (MEC): ACA marketplace plans, off-marketplace plans, Medicare, or student health plans.
Must Be in an Eligible Class
The IRS permits classes like: full-time, part-time, seasonal, geographic rating area, salaried vs hourly, and combinations.
ICHRA and ACA Affordability
For large employers (50+ FTE), ICHRA must meet ACA affordability standards. If it does not, employees can opt out and qualify for ACA premium tax credits.
Who Cannot Participate?
- Self-employed sole proprietors with no employees
- S-Corp owners with more than 2% ownership
- Partners in a partnership
- Employees who decline individual coverage