90-Day ICHRA Notice

90-Day ICHRA Notice: What It Is and Required Disclosures

A 90-Day ICHRA Notice is a legally mandated written document that employers must deliver to eligible workers at least 90 days before the start of each plan year. The notice explains the monthly reimbursement allowance, effective dates, opt-out procedures, and the specific impact on employee eligibility for ACA marketplace premium tax credits.

Regulatory Requirement

Under joint federal regulations issued by the IRS, Department of Labor (DOL), and Department of Health and Human Services (HHS) under 26 CFR 54.9802-4(c)(6), employers sponsoring an Individual Coverage HRA must provide written notice to every eligible employee at least 90 days prior to the first day of the plan year. For calendar-year plans starting January 1, this notice must be distributed no later than October 2 (or October 3 in leap years).

Required Content Disclosures

Federal rules dictate that every 90-day ICHRA notice must include several key disclosures:

• Maximum Dollar Allowance: The exact monthly reimbursement amount available to the employee (and dependent amounts, if offered).
• Effective Date: The official start date of the ICHRA coverage.
• Individual Coverage Requirement: Explicit notification that the employee and any covered family members must be enrolled in individual health insurance (or Medicare Parts A and B / Part C) for each month they receive reimbursements.
• Premium Tax Credit (PTC) Impact: Detailed guidance explaining that accepting an affordable ICHRA disqualifies the employee from receiving federal marketplace subsidies, and outlining the employee's right to opt out if the offer is unaffordable.
• Special Enrollment Period (SEP): Information explaining that the offer of an ICHRA triggers a 60-day Special Enrollment Period allowing employees to purchase individual health plans outside the standard Open Enrollment window.
• Contact Information: Contact details for the plan administrator (e.g., SimplyHRA) to answer benefit, claims, and enrollment questions.

Special Rule for Mid-Year Hires

For employees who become eligible mid-year (such as new hires or employees transitioning from part-time to full-time status), the 90-day rule is modified. The employer must provide the notice no later than the date on which the ICHRA can first take effect for that individual, allowing them to initiate their 60-day Special Enrollment Period.