4 ICHRA Pitfalls to Avoid This Open Enrollment Season

Open enrollment season is approaching quickly, and we're thrilled to see more brokers and businesses embracing ICHRAs as a solution.However, successful implementation depends on getting the details right. Inthis week's ICHRA Insider, our VP of Strategic Partnerships, Lisa Collins, identifies four common pitfalls that can determine whether your ICHRA rolloutg oes smoothly or becomes a source of frustration this fall.

About the Author: Lisa Collins is a renowned expert on employee benefits with a distinguished 30-year career spanning employee benefits, PEO, and payroll services. She is also a NABIP-approved instructor onIndividual Coverage Health Reimbursement Arrangements and leads frequentContinuing Education courses.

Gotcha #1– Your ICHRA Funding Strategy Ignores that Insurance Premiums Differ ByGeography

👉 Giving everyone in a company the same dollar amount for ICHRA Funding may sound fair, but in practice, rarely is.

Why? Individual premiums vary dramatically by state and even rating area. $500 in ICHRA Funding will a lot further in Salt Lake City than itdoes in New York City. The Utah employee will be able to buy top coverage andhave money left in their Health Wallet, whereas the New York employee will end up a several hundred dollar payroll deduction if they are to buy the same plan.

Tips to avoid this:

✔️ Benchmark your ICHRA Funding against a % of a metal tier instead of a flat dollar

✔️ Adjust contributions by geographic class to balance affordability

✔️ For true outliers, salary adjustments may be the only fix

Gotcha #2– Forgetting to Review the Formulary

💊 Each health plan has its own drug list.If prescriptions aren’t checked up front, employees can get hit with surprisecosts when their meds aren’t covered.

Tips to avoid this:

✔️ Review carrier formularies before enrollment.

✔️ Choose an ICHRA platform with strong advisory support for employees with unique needs.

✔️ Watch for carriers building more group-like individual plans: those can help smooth the transition.

Gotcha#3– Forgetting to Review the Provider Network

🏥 Individual networks are often more narrow and local than group plans. This isn’t always bad. National networks cost more,and many employees only need local care.

Tips to avoid this:

✔️ Use your ICHRA platform’s provider lookup tools

✔️ Confirm that key doctors and hospitals are in-network before switching.

Gotcha#4–How the Business Structure Affects ICHRA

👩💼 ICHRA eligibility depends on business structure.

C-Corp owners = ✅ eligible

S-Corp ≥2% shareholders = ❌ not eligible (including dependents, even if W-2)

Sole proprietors & partners = ❌ not eligible

💡Here’s a workaround:

If a spouse is a W-2 employee and participates in the ICHRA, the owner can be covered as a dependent.

Ready for Open Enrollment?

As open enrollment approaches, the difference between a seamless ICHRA rollout and a season full of headaches comes down topreparation. Our team at Venteur is here to support you. By proactivelyaddressing these four common pitfalls: funding strategy, formularies, provider networks, and business structure, you can set both your business and employeesup for success. With the right strategy and guidance, ICHRAs don’t just work,they transform benefits into a more flexible, predictable, and employee-friendly solution.