Classes

Employee classes help define which groups of employees are offered the ICHRA and how the benefit is administered across your workforce.

Before launch, review your class structure to confirm that it reflects your intended plan design and that employees are assigned consistently.

Review your employee class structure

Confirm that each class used in your ICHRA has a clear purpose and matches the structure established for the plan.

ICHRA rules permit certain employee classifications, but an internal HR or payroll category does not automatically become an ICHRA class simply because your organization uses it for another purpose.

Review your ICHRA class structure against your intended plan design before assigning employees.

Confirm employee assignments

Review which employees are assigned to each class.

Class assignment may depend on factors such as employment status, work location, hours or schedule, and other workforce characteristics relevant to the class definition used by your plan.

Employees who meet the same applicable class criteria should be administered consistently under the terms of the plan.

Review location information where relevant

If work location is relevant to a class definition under your plan, confirm that the employee information used to determine class eligibility is accurate.

Pay particular attention to remote employees, employees who change work locations, and employees who work across multiple locations.

A change in location may require review to determine whether the employee's existing class assignment remains appropriate under the terms of the plan.

Confirm allowances by class

Review the monthly allowance associated with each employee class.

If different classes receive different allowance amounts, confirm that the contribution structure matches the amounts approved for the plan year.

For more information about contribution configuration, see Allowances.

Review employee class changes during the plan year

Employee circumstances can change after launch.

A change in employment status, work location, or another factor used in your class structure may require review before changing the employee's class, allowance, or effective date.

Do not rely solely on a payroll or HR system update to determine that an ICHRA class change has occurred. Relevant workforce changes should also be reflected in the ICHRA administration process.

Complete your class review

Before completing your class review, confirm that:

• Each ICHRA class reflects the intended plan design.

• Employees are assigned to the appropriate class.

• Workforce information used for class assignment is accurate.

• Allowance amounts are correctly associated with each class.

• Remote or multi-location employees have been reviewed where relevant.

• Your team understands how employee changes that may affect class assignment will be reviewed and updated.

Once these items are confirmed, your class review is complete.

Important: This article provides general administrative information about ICHRA and does not constitute legal, tax, or accounting advice.

Consult your legal, tax, benefits, or other qualified professional regarding employee class requirements applicable to your organization.