Enter your total headcount, add the employee classes you plan to use, and say what each class is offered. The tool checks each one against 26 CFR 54.9802-4 and explains every flag in one sentence, with the paragraph cited.
Minimum = 10 if fewer than 100 employees; 10% of total employees, rounded down, if 100 to 200; 20 if more than 200 (26 CFR 54.9802-4(d)(3)(iii)).
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26 CFR 54.9802-4(d)(2) lists ten classes of employees an employer may treat separately for an ICHRA, plus any combination of them. They are full-time, part-time, salaried, non-salaried (such as hourly), same rating area, seasonal, collectively bargained, waiting period, non-resident aliens with no U.S. income, and temporary placement employees. A class outside that list cannot be used.
The employer must decide before each plan year which classes it will use and how it defines them, and cannot change them for that plan year (26 CFR 54.9802-4(d)(2)). Full-time, part-time and seasonal can each be defined under section 4980H or under the section 105(h) rules, but the three must follow the same system (paragraph (d)(4)).
A class subject to the rule must have at least 10 employees at an employer with fewer than 100 employees, 10 percent of total employees (rounded down) at an employer with 100 to 200 employees, and 20 employees at an employer with more than 200. A class below its minimum cannot be treated as a separate class (26 CFR 54.9802-4(d)(3)(i) and (iii)).
| Employees on day one of the plan year | Minimum class size |
|---|---|
| Fewer than 100 | 10 |
| 100 to 200 | 10% of total employees, rounded down (10 to 20) |
| More than 200 | 20 |
The test is run on the first day of the plan year and counts the employees in the class who are offered the ICHRA, not the number who enroll. A change in the class during the year does not affect it (26 CFR 54.9802-4(d)(3)(iv)).
The rule applies only when an employer offers a traditional group health plan to one or more classes and an ICHRA to one or more other classes (26 CFR 54.9802-4(d)(3)(ii)(A)). An employer that offers an ICHRA to every class, or offers no group plan, is not subject to it.
Even then it reaches only an ICHRA class that is full-time, part-time, salaried, non-salaried, or defined by a rating area, plus combinations that include one of those. It does not apply to a class offered the group plan or no coverage, to a class made up of an entire state or several entire states, or to seasonal, collectively bargained, waiting-period, non-resident alien or temporary-placement classes on their own. Full-time and part-time classes are tested only when one is offered the group plan and the other the ICHRA (paragraph (d)(3)(ii)(B) through (D)).
No. An employer that offers a class an ICHRA may not also offer that class a traditional group health plan, and may not give anyone a choice between the two (26 CFR 54.9802-4(c)(2)). The exception is the new hire subclass: an employer can keep a group plan for employees in a class hired before a future date and offer an ICHRA to those hired on or after it (paragraph (d)(5)). The minimum class size rule does not apply to that new hire subclass, and this tool does not model it.
InsureICHRA designs and runs ICHRAs for employers nationwide, including the class design, allowance levels by class and plan documents. Enrollment of employees in individual policies is handled by licensed agent partners. We are paid when an employer we advise puts an ICHRA in place and their people enroll through our licensed agent partners. We are not a law firm or an accounting firm, and nothing on this page is legal or tax advice.
This tool tests the class rules in 26 CFR 54.9802-4(c)(2) and (d) only. It does not test the same terms requirement, affordability or any other ICHRA rule, and it does not replace a review of the plan document.
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Bring your numbers from this page. The call is to work out whether an ICHRA fits your headcount, not to put you on a plan.
InsureICHRA designs and runs the arrangement. Enrolling an employee in an individual health plan is handled by licensed agents, and InsureICHRA is not an insurance agency, an insurance carrier or a licensed producer. Calls to this number reach a licensed agent. Nothing on this page is an offer of coverage or a recommendation of any plan or carrier. Plan availability, benefits and premiums vary by state, by carrier and by the employee's rating area. We are paid when an employer we advise puts an ICHRA in place and their people enroll through our licensed agent partners.