Can my employer offer a traditional group plan and an ICHRA?
Yes, with some restrictions.
Short Answer: Yes, this is allowed! Your employer can offer both traditional group health insurance and ICHRA to its employees, with two important stipulations.
- Everyone in the same "class" of employees must get the same type of benefit. Think of classes like buckets:
- Full-time employees = one bucket
- Part-time employees = another bucket
- Salaried vs. hourly = different buckets
- Different locations = different buckets
Some employee classes can get group insurance. Other employee classes can get ICHRA. But your employer CAN'T let people in the same class as you choose between the two—everyone in your class gets the same type of benefit.
Here's an example setup:
- Managers → Group health insurance
- Hourly workers → ICHRA
- If your employer goes this route, there must be at least 10 people in each employee bucket, or the employees must be separated out by geographic location. In a nutshell:
❌ NOT allowed:
- 8 managers get group insurance
- 5 hourly workers get ICHRA
- (ICHRA class is under 10)
Allowed:
- 11 managers get group insurance
- 15 hourly workers get ICHRA
- (Both groups have 10+)
Also allowed:
- Austin, Texas location gets group insurance
- New York City, NY location gets ICHRA
- (Geographic exception - no minimum)
Really important – Keep in mind that StretchDollar is not responsible if your employer's company becomes an ALE (>50 full-time employees) while offering both group health insurance and an ICHRA, which may require additional compliance reporting on your employer's part.