February 11, 2025

Yes, individual coverage health reimbursement arrangements (ICHRAs) are considered self-insured group health plans and thus are subject to ACA reporting rules, the same as other group health plans. It can be confusing to employers since many assume that the reporting obligations would be on the insurance carrier that actually delivers the individual coverage; but, in fact, the employer also has a reporting obligation. As a refresher, there are two facets of ACA reporting: 1) reporting offers of coverage to full-time employees (Section 6056, reported on Form 1095-C) and 2) reporting who was covered under a plan (Section 6055, reported on either 1095-B or 1095-C depending on funding type and employer preference).

The obligation under Section 6056 to report offers of coverage only applies to applicable large employers (ALEs), which are generally those employers with 50 or more employees in the previous calendar year. ALEs must report whether they made offers of coverage that met the minimum essential coverage, minimum value, and affordability standards to their full-time employees. Form 1095-C added codes in 2020 to use for Line 14 (these codes denote what type of offer was made) that are specific to employers offering ICHRAs. Employers that are ALEs should review the Line 14 codes specific to ICHRAs when completing their forms. As discussed below in more detail, ALEs also have an obligation to report who is covered by the ICHRA, which is handled in Part III of Form 1095-C.

Since ICHRAs are considered self-insured group health plans, the Section 6055 obligation (to report who was enrolled in coverage) is on the plan sponsor and applies regardless of employer size. Employers who are ALEs, as mentioned above, will meet this obligation by reporting enrollment in Part III of Form 1095-C. Employers that are not ALEs can fulfill the filing obligation by either using Form 1095-B or Form 1095-C since many vendors are not set up to file the “B” forms. In some cases, the ICHRA vendor provides Form 1095-B to enrollees; however, there is still an obligation for the employer to file it with the IRS. So, even if the ICHRA vendor is willing to handle some or all of the reporting, the employer needs to confirm the vendor is also filing those forms with the IRS. If not, then the employer would need to file themselves to meet their reporting obligations.

Additional information regarding recent changes to electronic filing requirements and furnishing forms to employees can be found in our recent Compliance Corner article. Employer clients can visit the PPI online Help Center for ACA Reporting materials and guidance.