Short answer: Confirm the classes, set the allowances, test affordability, adopt the plan document and hire an administrator, give the notice at least 90 days before the plan year, collect opt-outs, have employees buy individual coverage in their special enrollment window, and substantiate coverage before the first reimbursement.
Work backward from the date the ICHRA (CHOICE Arrangement) starts. For a plan year starting April 1, 2027, the notice must go out by January 1, 2027.
- 1. Map the workforce. Confirm who the common-law employer is, whether it is an applicable large employer, and which permitted classes will get the ICHRA and which (if any) keep a group plan. Check minimum class sizes when both are offered.
- 2. Set allowances. Same terms within each class, with optional increases by age (no more than 3 to 1) and by number of dependents. Decide on carryover and whether premiums only or other medical expenses are covered.
- 3. Test affordability for each employee (and, for a large employer, the employer mandate test).
- 4. Adopt documents and an administrator. Plan document, SPD, claims procedures, payroll handling, reporting and who handles COBRA.
- 5. Give the notice at least 90 calendar days before the plan year (the DOL model notice may be used).
- 6. Collect elections and opt-outs before the plan year.
- 7. Help employees enroll. Gaining the ICHRA opens an individual-market special enrollment period starting 60 days before the ICHRA can take effect. The employer may give general Marketplace information but should not select or endorse a particular carrier or plan.
- 8. Substantiate coverage by the first day of the plan year, then end the old group plan only after the new policies are confirmed.