ICHRA FAQs

Table of Contents
Welcome to the next generation of employer-sponsored health benefits
A Refresher on ICHRA
Getting Started with ICHRA + Zorro: The How-to Guide

Welcome to the next generation of employer-sponsored health benefits.

If you’re reading this, congrats! You’re ready to join the new wave of employers who know there’s a smarter, better way to offer personalized health benefits.

At Zorro, we help employers like you gain cost predictability and reduce the administrative burden of offering benefits, all while improving the quality of health benefits for your employees. Our solution is made possible by ICHRA (Individual Coverage Health Reimbursement Arrangement), a new model for health benefits enacted by the federal government in 2020. 

We’ve prepared the following guide to walk you through the process of setting up your ICHRA and working with Zorro. We can’t wait to see what we achieve together.

A Refresher on ICHRA

As you learned in our FAQs, ICHRA is a way to offer health benefits without the need to purchase a group plan. Employers decide on a stipend/allowance to give employees, who can then choose their own health insurance plan from any insurer in their State.

ICHRA makes the set-up equivalent to offering traditional group coverage: it allows employers to offer stipends/allowances on a tax-free basis for both sides, and fulfills the ACA employer mandate.

Getting Started with ICHRA + Zorro: The How-to Guide

Zorro is the end-to-end solution for optimizing the use of ICHRA in your business. We help you with every step of benefits design and administration, and we make sure you get all the advantages that ICHRA has to offer.

Now it’s time to start administering your ICHRA with Zorro. Here is your guide to how it works.

Here is your guide to how it works. 
And don’t worry, Zorro will be with you every step of the way.

Step 1: Share Employee Census & Objectives

The first step in your journey is to let us run the numbers and see what ICHRA and Zorro can do for your business.

You’ll upload or send us an employee census with basic details (employee DOBs and addresses) as well as your goals (like a top-line budget). If you want to build a more comprehensive benefits bundle, you’ll share a few additional details which we can walk you through.

Step 2: Receive Simulation Analysis & Set Allowance Model

Now, Zorro does our magic. Our data analytics engine will pull individual medical plan prices for each employee, create an optimization model, and recommend an allowance structure that best fits your goals.

We will share these results with you and collaborate on your finalized allowance model.

Step 3:  Set up Your Legal Plan

Now, we’ll work together on the technicalities. First up: setting up your plan.

Once an employer decides to set up an ICHRA, they are legally required to outline the plan in writing. This means creating a set of documents that includes:

• Employee class structure & reimbursement eligibility

• Monthly reimbursement amounts for each employee

• Claims processes

• Information on HIPAA and other privacy procedures

Zorro will draft these documents for you and send them to you for approval.

Step 4: Communicate with Your Employees

It’s time for a big announcement! You’ll need to tell your team about their new benefits structure and your partnership with Zorro. This announcement is mandatory, and it must include:

• Reimbursement amounts

• Instructions for using Zorro to select coverage

• Your ICHRA start date and enrollment deadlines

Zorro will help you draft this announcement, so each employee has all the information they need.

Step 5:  Employee Plan Selection

Offering an ICHRA triggers a Special Enrollment Period for your employees.

Once they receive the announcement email (and up until the predetermined deadline), your employees will use Zorro to select their desired health insurance plans.

Zorro’s behavioral science-based product will help your employees understand and select the best coverage option for them.

Step 6:  Transfer Funds

Next, you’ll transfer funds to a dedicated account, from which Zorro pays all insurance carriers.

You’ll also work with Zorro to set up payroll deductions for employees who contribute their own funds — beyond the predetermined reimbursement amount. (Most employees will fall into this category.)

Step 7: Ongoing Support from Zorro

Your employees are now set up with their new plans, and you’ve officially made the switch to using an ICHRA. Zorro will continue to work behind the scenes to:

• Maintain enrollment in all plans

• Take care of any compliance issues

• Onboard new employees

• Provide ongoing support to you and your team

Step 8: Tax Time

During tax season, Zorro will provide all the necessary documentation to make sure your business gets a tax deduction for offering an ICHRA.