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ICHRA Reporting Requirements

Although ICHRAs may not be a traditional way of providing benefits to employees, ICHRAs are considered minimum essential coverage, and ICHRAs are subject to the Internal Revenue Service (IRS) reporting requirements authorized under the Affordable Care Act (ACA). Employers who offer an ICHRA must submit annual reporting forms to the IRS for the 2021 calendar year as well as in future years.

Small employers, those with fewer than 50 full-time equivalent employees, must submit Form 1095-B for every employee who had coverage under the ICHRA in 2020. Form 1095-B lets the IRS know which employees (and dependents of the employee) were enrolled in minimum essential coverage in 2020. It also helps the IRS validate the eligibility for subsidized coverage on the Health Insurance Marketplace since enrollment in an ICHRA disqualifies an employee from receiving subsidies. Small employers also must submit one Form 1094-B on behalf of the organization.

Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs), which work very similar to ICHRAs but are only available to employers with fewer than 50 full-time equivalent employees, are not subject to the ACA reporting requirements. QSEHRAs first became an option for small employers to offer in 2017. QSEHRAs were signed into law as part of the 21st Century Cures Act and by definition are not considered minimum essential coverage. As a result, QSEHRAs escape the ACA reporting requirements.

Contact Clergy Financial Resources to help you with the next steps.

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (763) 425-8778 
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com

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