Short answer: The employee picks an individual plan (on the ACA marketplace or off-exchange) or Medicare, enrolls in it, and then submits proof to get reimbursed up to the employer’s ICHRA allowance. A new ICHRA offer triggers a special enrollment period to buy a plan.
With an ICHRA, the employer sets an allowance and the employee buys their own coverage. The steps: (1) when the ICHRA is offered, the employee gets a special enrollment period to choose an individual-market plan (HealthCare.gov, a state exchange, directly from an insurer, or Medicare); (2) the employee enrolls and pays the premium; (3) they submit proof of coverage and expenses, and the employer reimburses them tax-free up to the allowance. Employees should compare plans on network and total cost, and note that accepting an ‘affordable’ ICHRA makes them ineligible for a premium tax credit. Many employers provide an enrollment platform or broker to help.