Short answer: Sending the notice late, letting some employees choose between the group plan and the ICHRA, building classes that are not permitted or are too small, paying claims without proof of coverage, endorsing a particular individual carrier, and assuming one allowance is affordable for everyone.
- Late notice. It is due at least 90 days before every plan year, and lateness can cost employees their enrollment window.
- Offering a choice. No employee may choose between the traditional group plan and the ICHRA (CHOICE Arrangement).
- Bad classes. Classes must come from the permitted list; health status, claims and Medicare eligibility are not classes. Check the minimum class size when a group plan stays for another class.
- Allowances that break same-terms rules, such as an age schedule wider than 3 to 1.
- Paying without substantiation, or paying for months after an employee’s individual coverage ended.
- Treating non-use as an opt-out. Only an affirmative opt-out preserves a possible premium tax credit when the offer is unaffordable.
- Steering employees to one carrier. Selecting or endorsing a particular issuer can pull the individual policies into the employer’s ERISA plan.
- Running Marketplace premiums through the cafeteria plan. Only off-Marketplace premiums can be paid pre-tax.
- Forgetting the plan duties: plan document, SPD, ACA reporting, COBRA where it applies and PCORI.