December 1, 2020
Below and attached is information on our individual coverage health reimbursement arrangement or ICHRA:
Individual Coverage HRA Model Notice
USE THIS NOTICE WHEN APPLYING FOR INDIVIDUAL HEALTH INSURANCE COVERAGE
December 1, 2020
You are getting this notice because your employer is offering you an individual coverage health reimbursement arrangement (HRA). Please read this notice before you decide whether to accept the HRA. In some circumstances, your decision could affect your eligibility for the premium tax credit. Accepting the individual coverage HRA and improperly claiming the premium tax credit could result in tax liability. This notice also has important information that the Exchange (known in many states as the “Health Insurance Marketplace”) will need to determine if you are eligible for advance payments of the premium tax credit. An Exchange operates in each state to help individuals and families shop for and enroll in individual health insurance coverage. You will also need this notice to verify that you are eligible for a special enrollment period to enroll in individual health insurance coverage outside of the annual open enrollment period in the individual market.
I. The Basics
What should I do with this notice? Read this notice to help you decide if you want to accept the HRA. Also, keep this notice for your records. You’ll need to refer to it if you decide to accept the HRA and enroll in individual health insurance coverage.
What’s an individual coverage HRA? An individual coverage HRA is an arrangement under which your employer reimburses you for your medical care expenses up to a certain dollar amount for the plan year. If you enroll in an individual coverage HRA, you must also be enrolled in individual health insurance coverage or Medicare Part A (Hospital Insurance) and B (Medical Insurance) or Medicare Part C (Medicare Advantage) (collectively referred to in this notice as Medicare) for each month you are covered by the HRA. You can get more information on this plan by reviewing the cover letter that is included with this document.
The individual coverage HRA you are being offered is employer-sponsored health coverage. This is important to know if you apply for health insurance coverage on the Exchange
Note: There are different kinds of HRAs. The HRA that’s being referred to throughout this notice, and that your employer is offering you, is an individual coverage HRA. It is not a qualified small employer health reimbursement arrangement (QSEHRA) or any other type of HRA.
What are the basic terms of the individual coverage HRA that my employer is offering?
The HRA is the vehicle that allows your employer to reimburse you a portion of your self-only monthly insurance premium without having that reimbursement subject to taxes and other withholding's.
(1) The maximum dollar amount available for each participant in the HRA is the difference between 9.78% of your monthly W2 earnings and the total monthly cost of the lowest priced self-only Silver Plan on the Exchange (www.healthcare.gov). The amount of your maximum contribution increases to 9.83% on January 1, 2021. You may enroll your dependents on the plan, however the cost associated with their coverage is paid by you and is not eligible for the HRA reimbursement.
(2) Employer contributions may be higher for employees that are older. If you apply for individual health coverage through the Exchange, you need to tell them that your self-only coverage contribution is limited to 9.78% of your monthly earnings or 9.83% of your monthly earnings after January 1, 2021.
(3) In general, your HRA coverage will start November 1, 2020. If you are hired and are eligible (based on your scheduled work hours) after November 1, 2020, you have 90 days to decide if you want to participate in this plan and get enrolled in the lowest cost self-only Silver Plan.
(4) The HRA plan year begins on November 1, 2020 and ends on October 31, 2021.
(5) Amounts newly made available under the HRA will be made available within 60 days of your date of eligibility and enrollment.
Note: You will need this information if you apply for health insurance coverage through the Exchange.
Can I opt out of the individual coverage HRA?
Yes. You can opt out of the HRA. If you do not enroll in a qualifying plan within 90 days of your initial eligibility your employer will consider that you have waived participation in the plan.
If you terminate employment, you can keep your coverage however you will no longer be eligible for an employer reimbursement of your monthly premium through the HRA.
If accept the individual coverage HRA do I need to be enrolled in health coverage? Yes. You must be enrolled in individual health insurance coverage or Medicare for each month you are covered by the HRA. You may not enroll in short-term, limited-duration insurance or only in excepted benefits coverage (such as insurance that only provides benefits for dental and vision care) to meet this requirement.
II. Getting Individual Health Insurance Coverage
How can I get individual health insurance coverage?
If you already have individual health insurance coverage, you do not need to change that coverage to meet the HRA’s health coverage requirement.
If you don’t already have individual health insurance coverage, you can enroll in coverage through the Exchange or outside of the Exchange – for example, directly from an insurance company.
Note: People in most states use HealthCare.gov to enroll in coverage through the Exchange, but some states have their own Exchange. To learn more about the Exchange in your state, visit https://www.healthcare.gov/marketplace-in-your-state/.
If you are enrolled in Medicare Part A and B or Medicare Part C, your enrollment in Medicare will meet the HRA’s health coverage requirement. For information on how to enroll in Medicare, visit www.medicare.gov/sign-up-change-plans.
When can I enroll in individual health insurance coverage?
Generally, anyone can enroll in or change their individual health insurance coverage during the individual market’s annual open enrollment period from November 1 through December 15. (Some state Exchanges may provide additional time to enroll.) If your individual coverage HRA starts on January 1, you generally should enroll in individual health insurance coverage during open enrollment.
Since our individual coverage HRA starts on November 1, 2020 you can enroll in individual health insurance coverage outside of open enrollment using a special enrollment period.
If you qualify for a special enrollment period, make sure you enroll on time:
• If you are newly eligible for HRA coverage that would start at the beginning of the HRA plan year, you generally need to enroll in individual health insurance coverage within the 60 days before the first day of the HRA plan year.
• If the HRA was not required to provide this notice 90 days before the beginning of the plan year, or you are newly eligible for HRA coverage that would start mid-plan year (for example, because you are a new employee), you may enroll in individual health insurance coverage up to 60 days before the first day that your HRA can start or up to 60 days after this date. Enroll in individual health insurance coverage as soon as possible to get the most out of your individual coverage HRA.
Note: If you enroll in individual health insurance coverage through this special enrollment period, you may need to submit a copy of this notice to the Exchange or the insurance company to prove that you qualify to enroll outside of the open enrollment period. For more information on special enrollment periods, visit HealthCare.gov or the website for the Exchange in your state.
Do I need to get new individual health insurance coverage each year if I want to enroll in my individual coverage HRA each year?
Yes. Individual health insurance coverage is typically sold for a 12-month period that is the same as the calendar year and ends on December 31. Since our HRA plan year starts on November 1, 2020 you do not need to get new individual health insurance coverage or re-enroll until the next open enrollment period.If you are enrolled in Medicare, your Medicare coverage generally will remain in place year to year.
Do I need to prove my enrollment in individual health insurance coverage or Medicare to the individual coverage HRA?
Yes. You must prove that you will be enrolled in individual health insurance coverage or Medicare for the period you will be covered by the HRA.
Also, each time you seek reimbursement of a medical care expense from the HRA, you must substantiate that you have individual health insurance coverage or Medicare for the month during which the expense was incurred.
If you elect to participate in this program, your employer will provide you with the document that you must submit on a monthly basis to Kathryn Ameneiros by telephone at 732-218-9933 or by email to email@example.com
What happens if I am no longer enrolled in individual health insurance coverage or Medicare?
If you are no longer enrolled in individual health insurance coverage or Medicare, the HRA won’t reimburse you for medical care expenses that were incurred during a month when you did not have individual health insurance coverage or Medicare. This means that you may not seek reimbursement for medical care expenses incurred when you did not have individual health insurance coverage or Medicare.
Note: You must report to the HRA if your individual health insurance coverage or Medicare has been terminated retroactively and the effective date of the termination.
III. Information About the Premium Tax Credit
What is the premium tax credit? The premium tax credit is a tax credit that helps eligible individuals and their families pay their premiums for health insurance coverage purchased through the Exchange. The premium tax credit is not available for health insurance coverage purchased outside of the Exchange. Factors that affect premium tax credit eligibility include enrollment in Exchange coverage, eligibility for other types of coverage, and household income.
When you enroll in health insurance coverage through the Exchange, the Exchange will ask you about any coverage offered to you by your employer, including through an HRA. Your ability to claim the premium tax credit may be limited if y-our employer offers you coverage, including an HRA.
The Exchange also will determine whether you are eligible for advance payments of the premium tax credit, which are amounts paid directly to your insurance company to lower the cost of your premiums. For more information about the premium tax credit, including advance payments of the premium tax credit and premium tax credit eligibility requirements, see irs.gov/aca.
If I accept the individual coverage HRA, can I claim the premium tax credit for my Exchange coverage?
No. You may not claim the premium tax credit for your Exchange coverage for any month you are covered by the HRA. Also, you may not claim the premium tax credit for the Exchange coverage of any family members for any month they are covered by the HRA.
If I opt out of the individual coverage HRA, can I claim the premium tax credit for my Exchange coverage?
NO. Our HRA is considered affordable, so you cannot claim the premium tax credit for yourself.
If you are a former employee, the offer of an HRA will not prevent you from claiming the premium tax credit (if you are otherwise eligible for it), regardless of whether the HRA is considered affordable and as long as you don’t accept the HRA.
How do I know if the individual coverage HRA I’ve been offered is considered affordable?
The Exchange website will provide information on how to determine affordability for your individual coverage HRA. To find your state’s Exchange, visit: https://www.healthcare.gov/marketplace-in-your-state/.
Do I need to provide any of the information in this notice to the Exchange?
Yes. Be sure to have this notice with you when you apply for coverage on the Exchange. If you’re applying for advance payments of the premium tax credit, you’ll need to provide information from the answer to “What are the basic terms of the individual coverage HRA my employer is offering?” on page 1, item (1). You will also need to tell the Exchange whether you are a current employee or former employee.
If I’m enrolled in Medicare, am I eligible for the premium tax credit?
No. If you have Medicare, you aren’t eligible for the premium tax credit for any Exchange coverage you may have.
IV. Other Information You Should Know
Who can I contact if I have questions about the individual coverage HRA?
If you need further information, please contact Kathryn Ameneiros by telephone at 732-218-9933 or by email at firstname.lastname@example.org. You can also get additional information by emailing your questions to email@example.com.
[For use by an HRA subject to ERISA that meets the safe harbor set forth in 29 CFR 2510.31(l):
Is the individual health insurance coverage I pay for with my individual coverage HRA subject to ERISA?
The individual health insurance coverage that is paid for with amounts from your individual coverage HRA, if any, is not subject to the rules and consumer protections of the Employee Retirement Income Security Act (ERISA). You should contact your state insurance department for more information regarding your rights and responsibilities if you purchase individual health insurance coverage.
|Standard||1-5 business days||$7.95|
|Two Day||2 business days||$15|
|Next Day||1 business day||$30|
|* Free on orders of $50 or more|