How do Contributions work?

What an ICHRA Is (Quickly)

An ICHRA (Individual Coverage Health Reimbursement Arrangement) is a benefit an employer can offer that gives employees money tax-free to help pay for:

• Individual health insurance premiums 

The employee must be enrolled in individual market health insurance (not a group plan) to use the ICHRA.

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So Where Do Employer Contributions Fit In?

With an ICHRA:

• The employer decides how much money to contribute, per month or year.

• The contribution is not taxed for the employee.

• The money is only usable for eligible health costs (primarily premiums).

Example:

Your employer sets:

• $400/month ICHRA allowance

You go buy an individual market plan that costs:

• $450/month premium

You can use the ICHRA to pay $400 of the premium.

• The SureCo platform will calculate out the contribution from the total premium and display how much will be deducted from your paycheck to cover the difference.

If the plan costs more than the allowance (say $450/month):

• You pay the extra $50 spread out evenly over the number of pay periods per month.

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How the Money Actually Moves

This part is important:

ICHRA funds are prepaid.
The employer works in coordination with SureCo to make your monthly premium. The premiums are paid using your employer's contribution in combination with your payroll deduction (If any applies) to pay each month.

How it works:

1. Your employer's contribution plus,

2. Your payroll deduction equals,

3. SureCo making your premium payment on the employee's behalf.

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What About Marketplace Subsidies (Premium Tax Credits)?

You can’t use both an ICHRA and premium tax credits for the same month.

• If the ICHRA is considered affordable (based on federal rules), you must decline a tax credit.

• If the ICHRA is not affordable, you may decline the ICHRA and keep your marketplace subsidy.

This affordability test is based on:

• Employee's required contribution toward the lowest-cost Silver Plan

• Compared to about 8.39% of household income (the threshold changes yearly)

***The contributions and plans offered on SureCo's platform are considered affordable to the employee based on the affordability criteria mentioned above***