Frequently Asked Questions

Traditional group insurance uses a defined benefit model (like a pension) — the employer promises a specific result (a PPO with a $1,000 deductible) regardless of fluctuating cost. Premiums are based on the group's collective risk, and employers face unpredictable annual renewal increases — the "Renewal Heart Attack."

ICHRA uses a defined contribution model (like a 401k) — the employer sets a fixed monthly dollar allowance and each employee individually selects a plan on the ACA Marketplace.

• No renewal surprises — the employer's budget is fixed and completely predictable
• No participation minimums — unlike group plans, there is no 75% participation requirement
• Employee choice — each person picks their own plan, network, and tier
• Multi-state friendly — works seamlessly for remote and distributed teams
• Risk decoupled — the insurance company owns the risk, not the employer. If a catastrophic claim hits, the employer's renewal stays flat

Source: ICHRA Specialist Agent Training Manual — Module 1

Any employer regardless of size — from 1 employee to 10,000+ — can offer an ICHRA. There is no minimum or maximum employer size requirement under the IRS final rule.

ICHRA is especially effective for:

• Small businesses (2–50 employees) — simpler than group plan administration
• Companies with multi-state employees — no need to maintain multiple state group plans
• High-turnover industries (restaurants, retail, home health) — portability matters
• Businesses hiring remote workers — multi-state hiring without plan redesign
• Growth-stage companies — scalable benefit structure that adapts as headcount changes

Source: 26 CFR § 54.9802-4

QSEHRA (Qualified Small Employer HRA) is limited to employers with fewer than 50 full-time employees who do not offer a group health plan. It has annual contribution caps set by the IRS and all employees must receive the same offer (no class customization).

ICHRA has no employer size restrictions and no contribution limits. Employers of any size can offer ICHRA, set any contribution amount, offer different amounts by employee class, and even run alongside a group plan for a different class. ICHRA is the "scale" vehicle; QSEHRA is the "simplicity" vehicle.

Source: DOL ICHRA FAQ · IRC § 9831

ICHRA was established by a joint federal rule published June 20, 2019, and took effect January 1, 2020. The rule was issued jointly by three agencies: the Internal Revenue Service (IRS), the Department of Labor (DOL), and the Department of Health and Human Services (HHS).

ICHRA was created to address the fundamental structural flaw in American employer health benefits: the "Renewal Heart Attack." For decades, employers were trapped in a defined benefit model with unpredictable claims-driven premium increases. ICHRA shifts the model to defined contribution, giving employers budget certainty while preserving employee access to comprehensive ACA-compliant coverage.

Source: Federal Register 84 FR 28888 · Executive Order on Improving Price and Quality Transparency

Yes. ICHRA was officially authorized by a joint federal rule published in the Federal Register on June 20, 2019, issued jointly by the IRS, DOL, and HHS.

Employers who offer an ICHRA that meets the affordability requirements satisfy the ACA employer mandate (Section 4980H). Simply offering an ICHRA to at least 95% of full-time employees satisfies Penalty A. Ensuring the contribution makes the lowest-cost Silver plan affordable avoids Penalty B.

Source: Federal Register 84 FR 28888 · CMS.gov

For Applicable Large Employers (ALEs) — those with 50+ full-time equivalent employees — the ICHRA must pass an affordability test using this formula:

(LCSP Premium − ICHRA Allowance) < (Monthly Income × 9.96%)

The IRS provides three Safe Harbor methods since you rarely know exact household income:

1. W-2 Safe Harbor — Uses Box 1 wages. Most accurate but difficult for commissioned staff.
2. Rate of Pay — (Hourly rate × 130 hours) × 9.96%. Safest for hourly workers. Example: $15/hr × 130 = $1,950/mo → Affordability limit = $194/mo.
3. Federal Poverty Level (FPL) — The "Golden Shield." If affordable at FPL, it's affordable for everyone regardless of income. Requires a higher employer contribution.

Real-world example: Employee earning $4,000/month with a $500 LCSP premium and a $200 ICHRA allowance pays $300. Since $300 < $398.40 (9.96% of $4,000), this is affordable.

Source: IRS Rev. Proc. 2025-25 · 26 CFR § 54.4980H-5

The IRS imposes two "Pay or Play" penalties on ALEs who fail to follow the Employer Shared Responsibility Provisions:

Penalty A — "The Sledgehammer" (Section 4980H(a)):

• Trigger: Failing to offer Minimum Essential Coverage to at least 95% of full-time employees
• Cost: Approximately $2,970 per employee per year (indexed annually)
• The catch: The fine applies to every full-time employee (minus the first 30), not just those missed
• ICHRA fix: Simply offering the ICHRA to 95% of employees satisfies Penalty A completely

Penalty B — "The Tack Hammer" (Section 4980H(b)):

• Trigger: Offering coverage that is unaffordable AND a specific employee receives a tax subsidy on the Exchange
• Cost: Approximately $4,460 per subsidized employee per year
• ICHRA fix: Setting contributions that pass the affordability test eliminates Penalty B risk

Source: IRC § 4980H · ICHRA Specialist Agent Training Manual — Module 3

The Family Glitch is the most misunderstood concept in the ICHRA market. Here's the critical rule:

ICHRA affordability is calculated based strictly on the employee-only Lowest Cost Silver Plan. If the employer's ICHRA offer is deemed affordable for the employee's self-only coverage, the entire family is disqualified from subsidies (APTCs) on the Exchange — even if adding the spouse and kids costs $2,000/month and the allowance is only $400.

This creates a strategic decision for employers:

• Option A ("Affordable Path"): Offer a high allowance → no employer penalties, but employees with families pay full price for dependents with no subsidy help
• Option B ("Unaffordable Path"): Intentionally offer a lower allowance → the employee and family can waive the ICHRA and take the full subsidy on the Exchange. The employer may pay Penalty B, but it may be cheaper than funding a rich ICHRA for the whole family

Source: Treasury Decision 9968 · Training Manual — Module 3

If an employer offers an affordable ICHRA, the employee is not eligible for premium tax credits (PTC) on the HealthCare.gov Marketplace.

If the ICHRA is unaffordable, the employee must choose between two mutually exclusive outcomes:

1. Accept the ICHRA: They lose all subsidies
2. Waive the ICHRA: They unlock the subsidies on the Exchange

Critical warning: An employee cannot "double dip" — taking ICHRA funds and federal premium tax credits is considered tax fraud and results in an IRS clawback.

Source: HealthCare.gov — ICHRA and the Marketplace · IRC § 36B

Under IRS Controlled Group rules (IRC § 414), if a business owner has multiple companies, they are treated as one single employer for ALE status.

Example: An owner has three LLCs — Company A (5 employees), Company B (8 employees), Company C (3 employees). He thinks he's a "small employer." But under the IRS rule, these companies are aggregated to 16 employees and treated as one entity. If the total hits 50+, they're an ALE subject to employer mandate penalties.

Ignoring Controlled Group rules can cause the plan to fail discrimination testing and trigger massive IRS penalties. Always aggregate headcount across commonly owned entities.

Source: IRC § 414 · Training Manual — Module 2

The IRS defines 11 permitted employee classes — the "secret sauce" of ICHRA. Terms must be uniform within each class but can vary wildly between them:

1. Full-time employees (30+ hours/week) — often the highest allowance
2. Part-time employees (<30 hours/week) — typically a lower allowance
3. Salaried employees — differentiates management from general workforce
4. Non-salaried (hourly) employees — different contribution strategy
5. Seasonal employees — may be excluded or offered pro-rated allowance
6. Temporary employees (staffing firms) — often excluded to reduce overhead
7. Union employees (CBA) — must be classified separately
8. Waiting period employees (30/60/90-day new hires) — coverage after retention period
9. Non-resident aliens with no US-source income — generally excluded
10. Employees by geographic location (rating area) — critical for equalizing buying power across expensive vs. affordable markets
11. Any combination of the above — e.g., "Full-Time Hourly + Living in California"

Source: 26 CFR § 54.9802-4 · Training Manual — Module 2

The single most common mistake is defaulting to one class called "Full Time" and calling it a day. That works for a small 10-person LLC, but it falls apart the moment you have hourly workers, multi-state hires, or a waiting period for new employees.

The fix (from the Training Manual):

• Look at the client's census before you touch the quoting portal
• Identify natural groupings — Salary vs Hourly, HQ vs Remote, waiting period status
• Build a class for each group, even if some get the same contribution

Classes protect your client from ACA mandate penalties. They also create budget flexibility — different groups, different contributions, all 100% compliant under the IRS's 11 permitted classes.

Source: Training Manual — Module 2 (Day 2 Training)

No. Unlike QSEHRA, there is no annual contribution limit for ICHRA. Employers can set any monthly contribution amount they choose.

Contributions can also be adjusted by age using the IRS-approved 3:1 age-banding ratio. Since premiums rise with age, a flat $400 allowance might be affordable for a 25-year-old but unaffordable for a 60-year-old. The age-banding feature increases the allowance as the employee ages, keeping the "net cost" roughly the same for everyone and ensuring affordability across the board.

Source: Training Manual — Module 3 ("Age-Banded Shortcut")

If an employer offers a Traditional Group Plan to one class and ICHRA to another, they must meet minimum headcount requirements for the ICHRA class to prevent "cherry-picking" (keeping a rich group plan for managers while dumping sick employees into the individual market):

• Fewer than 100 employees: Minimum class size is 10 employees
• 100–200 employees: Minimum class size is 10% of the total workforce
• More than 200 employees: Minimum class size is 20 employees

Important exceptions: These minimums do NOT apply if (1) the employer only offers ICHRA (no group plan involved), or (2) the class is based on a "New Hire" subclass.

Source: 26 CFR § 54.9802-4 · Training Manual — Module 2

The reimbursement lifecycle follows five steps:

1. Selection: Employee shops via the TPA portal or quoting platform link
2. Attestation: Employee signs a monthly statement confirming they have Minimum Essential Coverage (MEC) — no verification = no reimbursement
3. Payroll deduction: The difference between the premium and ICHRA allowance is deducted from the employee's paycheck (pre-tax via Section 125 if using TPA Aggregation)
4. Consolidated funding: Employer transfers total funds (employee deduction + employer contribution) to the TPA
5. Payment facilitation: The TPA pays the insurance carrier directly, ensuring the carrier is paid on time and the employee doesn't have to "float" the premium

Critical rule: You cannot just give employees cash. It must be a tax-advantaged reimbursement for substantiated Minimum Essential Coverage. Your TPA automates the verification.

Source: Training Manual — Module 2 (Operational Mechanics)

Yes, but only if structured correctly. The IRS views an ICHRA as a "secondary health plan." If it reimburses medical expenses (copays, prescriptions) from day one, it's considered "disqualifying coverage" and the employee loses HSA eligibility.

Three configurations exist:

• Level 1: "Premium-Only" ICHRA (Most Common): ICHRA only reimburses insurance premiums. It never touches medical bills, so it doesn't count as disqualifying coverage. Employees can buy an HSA-qualified plan and fund their HSA normally.
• Level 2: "Post-Deductible" ICHRA (Advanced): ICHRA "sits on the sidelines" until the employee meets the IRS minimum deductible ($1,650+ for individuals). Then it unlocks and reimburses expenses for the rest of the year.
• Level 3: "Employee Choice" (Mixed Populations): During onboarding, the system asks "Do you have an HSA?" If yes → Premium-Only mode. If no → Full medical reimbursement unlocked.

Source: IRC § 223 · IRS Revenue Ruling 2004-45

Yes, FSAs are the perfect companion to ICHRA, but there is a strict "No Double-Dipping" rule — an employee cannot be reimbursed for the same dollar twice.

Modern TPAs solve this with Expense Stacking Logic:

1. Waterfall payment: When a claim is submitted, the system checks the ICHRA balance first
2. Automatic routing: If ICHRA pays the claim, the FSA is locked for that transaction. If ICHRA is empty, the claim flows to the FSA
3. Result: The receipt is "stamped" as paid, preventing fraud without manual spreadsheet work

Pro tip: If your client wants to offer HSAs, recommend a Limited Purpose FSA (LPFSA) — it only pays for dental and vision expenses, preserving HSA funds for long-term growth.

Source: IRS Notice 2013-54 · Training Manual — Module 4

S-Corp owners (>2% shareholders) cannot receive tax-free ICHRA reimbursements. This is the #1 point of friction during a sale. Here's how each ownership type works:

• C-Corp owners: Treated as W-2 employees. They can participate tax-free ✓
• LLC/Partnership owners: Not W-2 employees. Cannot receive tax-free reimbursements, but can deduct premiums on their personal returns
• S-Corp owners (>2%): Reimbursements must be added to their W-2 Box 1 as taxable income, though they are generally exempt from FICA taxes. The owner then takes the "Self-Employed Health Insurance Deduction" on their 1040, making it effectively pre-tax for income tax purposes

Payroll warning: Instruct the payroll administrator to manually flag any S-Corp owner. Do not use standard pre-tax or post-tax deduction codes for these individuals.

Source: IRS Notice 2008-1 · IRC § 1372

When employees pay their share of premiums pre-tax via Section 125, it lowers their taxable wage base. The employer does not pay the 7.65% FICA match (Social Security + Medicare) on those contributions.

The pitch: "Mr. Employer, for every $100 your employees contribute pre-tax, you save $7.65 in payroll taxes. Across 50 employees contributing $200/month, that's over $9,000/year in savings — often enough to cover an entire consulting fee."

Requirement: To use pre-tax deductions, the employer must have a signed Section 125 Premium Only Plan (POP) document, and the TPA must use Aggregation (employer → TPA → carrier payment flow).

Source: IRC § 125 · Training Manual — Module 4

In most cases, yes. With ICHRA, the employer's spend is fixed and predictable. There are no renewal negotiations, no carrier rate increases passed to the employer, and no surprise premium hikes. Premiums went up double digits in many markets over the last three years. With ICHRA, your contribution is your decision.

The savings come from multiple sources:

• Budget certainty: You set the number, not the carrier
• No claims risk: Catastrophic claims hit the carrier, not your renewal
• FICA savings: Pre-tax employee contributions save the employer 7.65% in payroll taxes
• No participation stress: No 75% minimum enrollment requirements

Source: Training Manual — Module 1 (The Budget Shield)

It can't. You set the budget. Your contribution is what you decide it is — there's no renewal negotiation, no carrier rate increase passed to you. The only variable is whether you decide to raise contributions, which you control entirely.

Individual plan premiums on the Marketplace may fluctuate year to year, but the employer's cost is locked at whatever monthly contribution they set. ICHRA renewal is a math adjustment, not a negotiation. You recalibrate contributions based on updated LCSP data, not claims history.

Source: Training Manual — Day 35 Objection Handling

Yes — this is one of the most powerful strategies in the Training Manual. Two common hybrid approaches:

Scenario A: The Geographic Pivot — A tech company in Denver has 10 employees in rural Nebraska where no group network exists. Move the Nebraska team to a "Geographic Class" and offer them an ICHRA to buy local plans, while keeping Denver employees on the group plan.

Scenario B: The "New Hire" Gradual Transition — Keep everyone hired before 1/1/2025 on the existing group plan. Everyone hired after that date goes into the ICHRA. Over 3–5 years, the group plan naturally sunsets through attrition — zero employee revolt.

Source: Training Manual — Module 2 (Hybrid Strategy)

Based on the Training Manual, prioritize employers who fit any of these criteria:

• Renewing at +10% or more — they're already looking for an exit from rising premiums
• Employees in 2+ states — group plans rarely serve distributed teams well
• Under 20 FTEs — admin burden of a group plan eats their margin
• High-turnover industries (restaurants, retail, home health) — portability matters
• Adding remote workers — multi-state hiring without plan redesign

When ICHRA may NOT be a fit: (1) "Network Deserts" where the dominant hospital system is absent from the Individual Market, (2) very small groups (under 5 lives) with high average age where group rates may actually be cheaper, (3) organizations with zero digital literacy.

Source: Training Manual — Module 1 (Strategic Optimization) · Day 24 Training

A Third-Party Administrator (TPA) is not optional — it is a legal and operational mandate. You cannot administer an ICHRA on a spreadsheet. The TPA performs four non-negotiable functions:

1. The HIPAA Firewall: Shields the employer from Protected Health Information (PHI) — the TPA sees claims internally and only reports "Approved/Denied" to the employer
2. The Gatekeeper (Substantiation): Verifies the employee's insurance is active and meets MEC before releasing a single dollar. Without this, reimbursements are tax fraud
3. The Banker (Aggregation): Receives one lump-sum check from the employer, splits it, and distributes individual payments to employees or carriers
4. The Reporter (Compliance): Automatically generates IRS Form 1095-C codes (1L, 1M, 1N), Form 720 (PCORI fee), and Form 5500 based on enrollment data

Think of the quoting platform as the dashboard where you design the car, and the TPA as the engine that drives it.

Source: Training Manual — Module 6 (Implementation & Logistics)

Yes. Under ICHRA, employees shop for individual plans on the ACA Marketplace. They can choose plans from the same carriers and networks they had before. The CEO can keep their Blue Cross; the remote worker in Florida gets a local Florida Blue plan.

The network reality: Individual networks (EPOs, specialized PPOs) are designed for regional efficiency. Before pitching a client, modern quoting platforms ingest the census and show exactly which doctors are "In-Network" for every single employee — flagging any "coverage gaps" before you present a proposal.

Source: Training Manual — Module 0 (Network Advantage)

No. The Training Manual addresses this as the #1 employer objection. ICHRA Masters provides structured enrollment support — guided plan selection, side-by-side plan comparisons, and a dedicated questions line. Most employees finish enrollment in under 20 minutes.

The shopping experience is straightforward:

1. Login: Employee sees their monthly allowance (e.g., "$500/month")
2. Compare: The system ranks plans by "Net Cost" (Premium minus Allowance) and filters by doctor/prescription
3. Select: Employee picks a plan and provides enrollment details

Source: Training Manual — Module 5 · Day 35 Objection Handling

The employee pays the difference out of pocket. However, they have the freedom to choose a plan at a price point that works — they can select a lower-tier plan (Bronze instead of Gold) to keep costs minimal.

The "Zero-Dollar" Trap: If an employee has a $500 allowance but buys a $400 plan, they do not get to keep the extra $100. It stays with the employer. Strategy: Encourage them to use that "extra" money to buy a better plan (Gold/Platinum) since it costs them nothing out of pocket.

If the ICHRA is deemed unaffordable under IRS rules, the employee can opt out entirely and receive premium tax credits on the Marketplace.

From the Training Manual's "Bill of Responsibilities" — employees must understand three ongoing duties:

1. Monthly Attestation ("The Truth Requirement"): Every month, verify with the TPA that you still have coverage. No verification = no reimbursement
2. Payment Discipline: Premium payments must be made on time. Use Auto-Pay or a TPA payment solution to prevent policy cancellation and ICHRA fund suspension
3. The "Double Dip" Warning: If you accept ICHRA funds, you must stop any federal premium tax credits immediately. Taking both is tax fraud and results in an IRS clawback at tax time

What you CAN'T use ICHRA funds for: Healthcare Sharing Ministries, Short-Term Medical Plans (not MEC), or a spouse's group plan (pre-tax double dipping).

Source: Training Manual — Module 5 (Bill of Responsibilities)

ICHRA can reimburse Medicare premiums, but the process differs by coverage type:

• Medicare Part D (Rx) and Medigap: These bill the senior directly — treat like normal receipts and submit to the TPA
• Medicare Part B: Deducted automatically from Social Security. Use the "COLA Letter" Workflow — upload the Social Security benefit verification letter once, and the TPA sets up a recurring monthly reimbursement automatically

Critical rules for employers with 20+ employees: ICHRA is Primary to Medicare (Medicare Secondary Payer rules). You cannot offer any financial incentive for an active employee to drop ICHRA and go on Medicare — this is a violation of MSP rules with fines up to $11,524 per violation.

Never attempt to pay Medicare directly. The money must go to the employee as reimbursement.

Source: Training Manual — Module 6 & 9 (Medicare Exception)

The Notice of Offer is a mandatory legal document that triggers a 60-day Special Enrollment Period (SEP) — the "Golden Ticket" that allows employees to purchase individual health insurance outside of the standard Open Enrollment window.

• New launches: Employees have 60 days before and 60 days after the ICHRA start date to pick a plan
• Annual renewals: Employers must re-issue the Notice of Offer 90 days before the start of the new plan year (e.g., by October 3rd for a January 1st renewal). This is a legal requirement, not optional

The "15th of the Month" Deadline: To have coverage start on January 1st, the application generally must be submitted by December 15th. Missing this date means coverage may not start until February 1st, leaving the employee uninsured for a month.

Source: 45 CFR § 155.420 · Training Manual — Module 5

The binder payment is the first month's premium — the "first month's rent" that activates the insurance policy. Even if an employee is enrolled, the policy is not active until that first payment clears.

This creates the "Cash Flow Gap" (Binder Paradox): Most TPAs won't release ICHRA funds until they see proof of coverage, but the carrier won't issue an ID card until they receive the binder. Three solutions:

1. Payroll Advance: The employer runs a one-time advance 15 days before the plan starts
2. Virtual Card Advance: The TPA distributes a single-use virtual credit card pre-loaded with the exact binder amount, restricted to insurance premium merchant codes
3. The "Loud Warning": Explicitly tell employees during onboarding that they must pay the first premium on their personal card before reimbursement begins

Source: 45 CFR § 155.400(e) · Training Manual — Module 6

This is the most dangerous legal trap in ICHRA. If an employer crosses the line and "endorses" a specific plan, they risk creating a Group Health Plan made up of individual policies — triggering a compliance nightmare.

The ERISA Safe Harbor requires four criteria:

1. Voluntary participation: Purchasing individual insurance is completely voluntary
2. No endorsement: The employer does not select or endorse any particular carrier or coverage
3. No profit: The employer receives no kickbacks from the employee's selection
4. Sole responsibility: Reimbursement is limited to actual premiums; the employer doesn't pay claims

The employer can provide neutral information ("In your zip code, there are plans from Cigna, Blue Cross, and Ambetter. The choice is entirely yours.") but cannot push a specific product.

Source: ERISA Safe Harbor · Training Manual — Module 5

There's a critical distinction between the policy and the allowance:

• The insurance policy: The employee owns it. When they quit, they keep the policy and pay 100% of the bill themselves. This is portability, not COBRA
• The HRA allowance: This is the employer's money and is subject to COBRA

For employers with 20+ employees (Federal COBRA):

• Must send a COBRA Election Notice within 14 days of termination
• The cost is typically the monthly allowance + 2% administrative fee (e.g., $500 allowance → $510 COBRA payment)
• Most employees decline since they keep their policy regardless

For employers with <20 employees: Exempt from Federal COBRA, but may be subject to State Mini-COBRA laws. Verify if your state includes HRAs in its definition of "group health coverage."

Source: DOL COBRA Guide · IRS Notice 2002-45

ICHRA Masters is the only ICHRA platform built by agents, for agents. It provides:

• Real-time quoting — generate ICHRA quotes while sitting with your client, no outsourcing required
• Automated affordability checks — every quote runs against the Lowest Cost Silver Plan in each employee's rating area. Green = affordable. Red = adjust the contribution
• Plan modeling — build, break, and rebuild quotes with the live Quote Modeling tool
• Class design engine — model various class structures and visualize contribution levels for compliance
• Seamless enrollment — move from quote to enrollment without back-and-forth
• Full client management — accounts, renewals, census management, and changes in one place

The critical difference: you never sign over your AOR. Your National Producer Number (NPN) is hard-coded into every transaction so you retain full control and full commission.

Absolutely not. This is a core principle of the platform. ICHRA Masters never requires agents to surrender their AOR. You retain 100% ownership of your book of business, your commissions, and your client relationships.

As the Training Manual warns: some "Direct-to-Employer" tech firms silently insert their own National Producer Number (NPN) into the application flow, stealing your commission and AOR status. ICHRA Masters was built specifically to prevent this.

Read about the 3 biggest lies in the ICHRA industry →

Source: Training Manual — Module 8 (Protecting the AOR)

It's free to get started. There is no upfront cost to begin quoting and enrolling ICHRAs on the platform. Schedule a strategy call to learn about the complete pricing model and see a live demo.

ICHRA Masters is headquartered in North Augusta, Georgia, and serves licensed health insurance agents and brokers nationwide across all 50 United States.

From the Training Manual (Day 5): Most brokers over-explain ICHRA with carrier sheets and 12-slide decks. The employer's eyes glaze over by slide 3. Here's the three-sentence pitch:

1. "You set a budget you can actually predict. Same number every month, no surprise renewals."
2. "Your employees pick their own plan with that money — same carriers they'd see on Healthcare.gov, but pre-tax through you."
3. "You stay out of the renewal hamster wheel. I stay your advisor. Compliance is handled."

If they want details, they'll ask. If they don't, you've delivered the value prop in 20 seconds.

Source: Training Manual — Day 5 (The Three-Sentence Pitch)

From the Training Manual's Objection Handling Module:

❶ "Our employees won't know how to pick a plan."
We provide structured enrollment support — guided selection, plan comparison, dedicated questions line. Most employees finish in under 20 minutes.

❷ "What if our renewal goes up?"
It can't. You set the budget. There's no renewal negotiation, no carrier rate increase passed to you. The only variable is whether you decide to raise contributions.

❸ "Our employees love our current plan."
Then they'll love this more. Under ICHRA, they can keep the same network, same doctor, often the same carrier — and get a plan tier that matches their family instead of an average.

❹ "This sounds risky."
The risk is in staying put. Premiums went up double digits the last three years. With ICHRA, your spend is fixed. The risk profile is actually lower than the group plan you're on now.

Source: Training Manual — Day 35 (Objection Handling)

The myth that ICHRA means a pay cut is false. When structured correctly, the ICHRA "Revenue Stack" often exceeds a traditional group policy:

Traditional Group	ICHRA Revenue Stack
Base Commission: ~$30 PEPM	Base Commission: ~$20 PEPM (Individual)
Consulting Fee: $0 (included)	Consulting Fee: +$25–$50 PEPM (Employer Paid)
	Ancillary Bundle: +$10 PEPM (Group Dental/Vision/Life)
Total: ~$30/employee	Total: ~$55+/employee

By charging a professional fee for the strategy — something employers are happy to pay for budget certainty — you decouple your income from the carrier's whims.

Source: Training Manual — Module 8 (Revenue Stack)

The Training Manual devotes an entire section to this threat. Many "Direct-to-Employer" tech firms use Enhanced Direct Enrollment (EDE) pathways to silently insert their own NPN into applications — stealing your commission.

The three-step defense strategy:

1. Hard-code your NPN: Verify your NPN is embedded in every shopping link. Test links yourself before sending to employees
2. Contract review: Read your TPA agreement. Look for "TPA agrees to not act as Producer of Record." If missing, demand it be added
3. Broker Designation Form: For Off-Exchange carriers, have each employee sign a Broker Designation Form during onboarding — it "locks" you in with the carrier

Read about the 3 biggest lies in the ICHRA industry →

Source: Training Manual — Module 8 (Protecting the AOR)

The transition process from the Training Manual follows a structured execution timeline:

1. Phase 1 — Qualify: Run the "Anti-Pitch" analysis. Verify ICHRA is a fit using network heat maps and census data. Identify non-fits (Network Deserts, small/old groups)
2. Phase 2 — Design: Collect census data, design employee classes, set contribution amounts, run affordability stress tests
3. Phase 3 — Implement: Select TPA, generate legal documents (Section 105 Plan Document, Section 125 POP, Wrap Document), set up payroll integration
4. Phase 4 — Enroll: Send 90-Day Notice of Offer, guide employee shopping, collect waivers from those who decline
5. Phase 5 — Operate: Monthly attestation, TPA substantiation, quarterly Section 111 reporting
6. Phase 6 — Renew: Annual affordability recalibration, LCSP benchmark audit, contribution adjustment

Critical step: Execute the "Kill Switch" — explicitly cancel the legacy group plan effective 11:59 PM the day before ICHRA starts. Get written confirmation from the carrier.

Read the full transition guide →

Source: Training Manual — Modules 6 & 11 (Execution Timeline)

From the Training Manual's Compliance Calendar:

• Daily/Monthly: TPA handles substantiation (receipt checking) and monthly attestation. If an employee stops paying premiums, the TPA suspends the account automatically
• Quarterly: Section 111 (MMSEA) reports to CMS for groups with 20+ employees — prevents Medicare from paying "Primary" by mistake. Failure to file: up to $1,000/day per claimant
• January 31: Form 1095-C (for ALEs 50+) with specific codes (1L, 1M, 1N) proving affordability. W-2 reporting updated
• July 31: Form 720 (PCORI Fee) — a small IRS tax (~$3–4 per head) to fund research. Also Form 5500 for plans with 100+ participants
• October 15: Medicare Part D Creditable Coverage Notice — tells employees if their drug coverage is "as good as Medicare"

Source: Training Manual — Module 7 (Compliance Calendar)

ICHRA renewal is fundamentally different from group renewals. It's a math adjustment, not a negotiation.

1. The 90-Day Reset: Re-issue the Notice of Offer 90 days before the renewal date (by October 3rd for a January 1st renewal) to trigger the new SEP
2. Affordability Stress Test: Use the quoting platform to re-run LCSP data for each employee. Check whether contributions still meet the affordability threshold (9.96% for 2026)
3. Buffer Strategy: Don't design contributions to hit exactly the IRS limit. Aim for 0.5%–1.0% lower (e.g., target 9.0% when the limit is 9.96%) to create a safety margin against carrier rate increases
4. Client retention: Present the renewal as a budget recalibration, not a rate increase. Show the employer exactly what changed and why

Source: Training Manual — Modules 9 & 10 (Annual Renewals)

The Training Manual lists five mandatory compliance documents — the "Paper Shield":

1. Section 105 HRA Plan Document & SPD: The legal foundation. Without it, the IRS treats every dollar given to employees as taxable wages, not a tax-free benefit
2. Section 125 POP Document: Allows employees to pay their share of premiums pre-tax. Must be signed and current (within 5 years)
3. Section 105 "Wrap" Document: Bundles the ICHRA, Dental, and Vision into a single ERISA welfare benefit plan — simplifying compliance by requiring only one Form 5500 instead of three
4. Privacy Officer Designation: An internal memo appointing someone (usually the HR Director) to handle HIPAA issues. Required even though the TPA handles the data
5. ERISA Fidelity Bond: Insurance protection against theft of plan assets. Required by the Department of Labor if the plan handles employee money. Cost: ~$100/year

Source: Training Manual — Module 6 (Legal Setup)

While federal ICHRA rules are universal, the rise of remote work has exposed employers to state-level individual mandates and reporting requirements. If a Texas company hires one remote worker in New Jersey, they must comply with NJ reporting laws.

The "Watch List" states (from the Training Manual):

• California: Must file Form 1094/1095-C with the Franchise Tax Board by March 31
• New Jersey: Must file via MFT SecureTransport by March 31
• Massachusetts: Requires Form 1099-HC distribution by January 31
• Rhode Island & DC: Distinct filing deadlines in March/April

Agent strategy: When selecting a TPA, specifically ask: "Does your system track state-level filing for CA, NJ, and MA?" If not, you must charge a consulting fee to handle it manually.

Source: Training Manual — Module 9 (State-Specific Reporting)