GROUP + ICHRA / CHOICE
One employer.
More than one funding path.
An employer may be able to offer a traditional or level-funded Group plan to one federally permitted employee class and an ICHRA / CHOICE Arrangement to another. The class design must follow the federal rules and cannot be based on health or expected claims.
PERMITTED EMPLOYMENT DISTINCTIONS
The class must begin with how people work—not how they use healthcare.
Federal rules identify specific employment classes that may support different coverage offers. The arrangement must also satisfy same-terms, notice, substantiation, affordability, reporting and other applicable requirements.
Claims, diagnoses, prescriptions and projected risk never determine an employee’s class.Predictive Risk Intelligence can help the employer evaluate funding at an aggregate population level. It cannot be used to sort individual employees into Group or ICHRA coverage.
MINIMUM CLASS SIZE
Some Group-plus-ICHRA structures must clear a numerical threshold.
The rule can apply when traditional Group coverage is offered to one class and ICHRA is offered to another based on full-time/part-time, salaried/non-salaried or a geographic area smaller than a state. It can also apply to combinations involving those classes.
| Employees expected on first day of plan year | Preliminary minimum for applicable ICHRA class |
|---|---|
| Fewer than 100 | 10 employees |
| 100–200 | 10% of total employees, rounded down |
| More than 200 | 20 employees |
The test generally counts employees offered the ICHRA on the first day of the plan year—not only those who enroll. An entire-state or multi-state geographic class generally is not subject to the geographic minimum-size rule. Final applicability depends on the complete structure.
BLENDED FUNDING ILLUSTRATIONS
Where Group and CHOICE may work together.
These examples are starting points for analysis. Carrier eligibility, participation, underwriting and administration requirements still control.
Salaried and hourly
Evaluate an available Angle level-funded plan for one permitted class and ICHRA / CHOICE for another after confirming class size and carrier eligibility.
Headquarters and remote employees
Keep Group where the network is strong and evaluate ICHRA for a permitted geographic class in individual markets that better fit those employees.
Grandfathered and future hires
Consider the prospective new-hire rule where the employer wants a measured transition rather than moving every employee at once.
Federal guardrails
- No Group-versus-ICHRA choice for employees in the same class.
- ICHRA generally offered on the same terms within a class.
- Class definitions established and applied consistently.
- Required notices, substantiation and reporting completed.
Employer-specific confirmation
- Class-size rule and employer count.
- Carrier and administrator acceptance.
- Affordability and contribution design.
- Individual-market availability, networks and employee impact.
Official sources: CMS FAQs on new HRA coverage options and federal final-rule materials published by the IRS. This page is general information and not legal or tax advice.
Do not choose the product first.
Start with the census, workforce structure, renewal and market. Then determine whether Group, CHOICE or a permitted combination fits.