There’s a lot of upside to offering an ICHRA: more flexibility, greater cost control, and much more choice for employees. However, an ICHRA is still a group plan, and with that comes crucial annual reporting requirements your clients can’t afford to miss.
Fortunately, these ICHRA reporting requirements aren’t as daunting as they may seem. This is especially true when Nexben provides most of the plan data administrators need to complete their forms and pay their annual PCORI fee.
As a broker, you don’t need to be a compliance expert. But you should be aware of ICHRA reporting requirements and understand the role you and your clients play in staying compliant. Below is a quick overview of the forms ICHRA plan sponsors may need to file, what’s due when, and how Nexben supports the process.
IRS Forms to file as part of ICHRA reporting requirements
Below is a list of some of the forms an employer may need to file to meet ICHRA reporting requirements. The list doesn’t include everything an employer must do for proper ICHRA administration, but it’s a good starting point.
Nexben provides the plan data administrators need to complete the forms, but does not fill out or submit the forms on the employer’s behalf. If you or your employer clients have questions at any time, we recommend contacting a legal or tax expert or getting information directly from the IRS.
1. File Form 720 and Pay PCORI Fee
Due July 31
Every employer with an ICHRA plan must file Form 720 and pay the required Patient-Centered Outcomes Research Institute (PCORI) fee. This requirement applies to all ICHRAs, regardless of size. Form filing and payment are due by July 31.
To complete the form, employers will need to know the average number of lives covered by the plan during the reporting period. Nexben makes this information available to plan administrators each January so they have what they need when it’s time to file.
Form 720 & PCORI Fee Instructions:
- Gather the data you need from Nexben. Nexben sends this information to employer administrators in January.
- Complete and file Form 720. (Find instructions here.)
- Pay the PCORI fee by July 31. The fee is $3.47* multiplied by the average number of lives covered under the plan. (*This is the fee for plan years ending on or after October 1, 2024, but before October 1, 2025.)
- Keep a copy for your records.
2. File Form 5500 to Meet ERISA Requirements
Due July 31 (for calendar-year plans)
ICHRA plans that are subject to the Employee Retirement Income Security Act (ERISA) and don’t meet the small group exception (more on that below) must file Form 5500. If a client isn’t sure whether they need to file this form, it’s best to consult a legal expert or review information from the Department of Labor. Penalties for late, incomplete, or missing 5500 filings are steep, so filing this correctly is very important.
The Form 5500 deadline is the last day of the seventh month following the last day of the plan year. For ICHRAs that operate on a calendar year, this is July 31, assuming there’s no requested extension. Nexben supplies relevant plan data to support Form 5500 reporting.
Your clients may qualify for the small plan exception if:
- The ICHRA had fewer than 100 participants (excluding spouses and dependents) on the first day of the plan year.
- The plan is funded solely through the employer’s general assets or insurance.
Form 5500 Instructions for applicable ICHRA plans:
- Determine if your client is subject to ERISA requirements.
- If they are, instruct your client to gather necessary data from Nexben. Nexben sends this information to employer administrators in January.
- Complete and file Form 5500 by the last day of the 7th month following the last day of the plan year. Or, by July 31 for calendar-year plans. (Find instructions here.)
- Keep a copy for your records.
3. File Forms 1094/1095 to Report Health Insurance Coverage
Due in late Q1
Form 1094 and Form 1095 are ACA-required forms that show the health coverage offered by the employer during the previous plan year. The form version the employer files depends on the size of the group. For example, Applicable Large Employers (ALEs) will file Form 1094-C and Form 1095-C, while small employers with fewer than 50 full-time equivalent employees will file Forms 1094-B and 1095-B.
The deadline for these forms varies based on whether you file them by mail or electronically, but they are typically due late Q1. Employers who don’t file these correctly or on time risk penalties, so it’s essential to get this right.
Nexben provides 1094/1095 data in January, including monthly coverage information and premium amounts. Employers may need additional details, like the lowest-cost silver plan data, that we don’t collect on our platform. Be sure to remind clients to review the forms early and talk to a qualified expert if they need help.
Form 1094 / 1095 Instructions for ICHRA plans:
- Determine which version of the forms your client needs to file (B or C).
- Instruct your client to gather the necessary data from Nexben and locate any additional information you need that’s not provided by Nexben.
- Complete and file the applicable forms. (Find instructions for the B versions here and the instructions for the C versions here.)
- Keep a copy of these forms, so it makes it easier to complete PCORI and ERISA filings later in the year.
How Nexben simplifies ICHRA administration and reporting
Nexben makes it easier for clients to meet ICHRA reporting requirements by providing key data in January, long before filing deadlines hit. While we don’t submit forms or offer legal advice, we make sure you and your clients have access to the data needed to complete the required forms.
If you or your clients run into issues or have specific compliance questions, contact a CPA, benefits attorney, or other filing expert.
ICHRA reporting is important, but it doesn’t have to be a headache. With a bit of prep — and the right data — employers can meet their compliance obligations with confidence. Your role as a broker is to keep them informed and connected to the right resources. Nexben is here to help make it easier.
About Nexben
Nexben is a financial technology company that makes defined contribution health benefits simple, seamless, and powerful. Connect with us to learn how partnering with Nexben can help you deliver smarter, more cost-controlled solutions to your clients.