Short answer: In two steps: before the plan year starts (or by the date the HRA starts for someone who joins later), they show that they and each covered dependent are or will be enrolled in individual coverage or Medicare; then, with every reimbursement request, they confirm the coverage was still in force for the month the expense was incurred.
Under 26 CFR 54.9802-4(c)(5), reasonable procedures for the up-front step can accept either a third-party document (an insurance card, an explanation of benefits, or Exchange paperwork) or the participant’s attestation naming the coverage, its start date and the carrier. The ongoing check can be a written attestation built into the claim form. The ICHRA (CHOICE Arrangement) can rely on these unless it has actual knowledge that the coverage is not in place.
Proving coverage is separate from proving the expense. The administrator still needs a receipt or invoice for each premium or medical expense.
What happens when coverage ends:
- The HRA cannot reimburse expenses incurred after a person’s individual coverage ends.
- If the employee and every covered dependent lose individual coverage, the employee forfeits the HRA.
- Expenses incurred before the coverage ended can still be reimbursed within a reasonable claim deadline the plan sets.