Minimum Class Size Rule (ICHRA)

Minimum Class Size Rule: Regulatory Guardrails for ICHRA

The Minimum Class Size Rule is a federal anti-discrimination regulation established under IRC § 105(h) and joint DOL/HHS rules preventing employers from creating artificially small employee classes that could selectively steer unhealthy individuals onto the individual exchange.

When Does the Rule Apply?

The minimum class size threshold applies whenever an employer offers a traditional group major medical plan to one employee class while offering an ICHRA to another class within the following classifications:

• Full-time vs. Part-time employees
• Salaried vs. Hourly employees
• Geographic / Rating Area employee classes

Statutory Threshold Requirements

Important Exception: If an employer offers only an ICHRA across the entire company (or to standard distinct classes without offering a concurrent group plan), the minimum class size rule does not apply.