Phone: (888) 889-9432

EEOC Issues Opinion Letter on ICHRAs and the ADEA

In 2020, Individual Coverage Health Reimbursement Arrangements (ICHRAs) gained popularity as many employers faced tough employer-sponsored health care coverage options. As with all new offerings, as more individuals become covered by the plans, new questions arise and guidance must be issued related to those questions. That is exactly what occurred with ICHRAs and the contributions made available to individuals enrolling in the plans. The concern surrounded potential discrimination related to the contributions as it relates to the Age Discrimination in Employment Act of 1967 (ADEA).

To address the concerns that were posed, on January 7, 2021 the Equal Employment Opportunity Commission (EEOC) issued an opinion letter to clarify the options that an employer has in offering an ICHRA, i.e., either by utilizing a defined contribution approach or a specified percentage approach. The EEOC has made it clear that the issued opinion letter only relates to matters questioned under the purview of the ADEA and does not take into consideration other laws that exist.

The Legal Update provides more insight on the EEOC’s opinion regarding the offering of these plans and the employer contributions approach utilized in doing so.

Read the Legal Update.

Consult the Cowden team for any questions or assistance that you may need.