Published by ICHRA Report September 11, 2026 · Sources reviewed through September 11, 2026 (America/Chicago).
Two separate decisions can interact with an ICHRA: whether an employee is eligible to contribute to an HSA, and whether the employee is eligible for a Marketplace premium tax credit. Neither can be answered from the benefit’s name alone.
The HSA change
IRS Notice 2026-5 explains that qualifying individual bronze and catastrophic plans available through an Exchange can be treated as high-deductible health plans for HSA purposes after December 31, 2025. Q&A 5 says using ICHRA to buy the coverage does not itself remove that status. It also says an HRA generally must reimburse only premiums to avoid disqualifying the individual. source
Plan eligibility and personal eligibility are different checks. A label on an insurance plan cannot establish the employee’s entire tax position or resolve the effect of other coverage. Employees should verify the exact policy, the HRA reimbursement design and their own circumstances before contributing.
The notice also addresses certain off-Exchange coverage. That is not a reason to assume every off-Exchange product is suitable, or that every person can purchase a catastrophic plan. Ask for the exact rule and plan documentation that applies. source
The ICHRA and premium-tax-credit decision
An affordable ICHRA offer generally prevents premium-tax-credit eligibility even if the employee declines it. With an unaffordable offer, the employee must opt out and meet the other tax-credit requirements to qualify. The 2026 required contribution percentage is 9.96%; the result still depends on the proper calculation and circumstances. source source source
A payroll message saying the employer contribution is “tax-free” does not answer whether Marketplace assistance is available. Employees need the actual offer information and an explanation of how to report it accurately when evaluating coverage.
Excess advance credits: the repayment cap changed
The IRS states that there is no excess advance premium-tax-credit repayment cap for tax years after 2025. If advance credits exceed the allowed credit, the full difference must be repaid. Employees should keep their Marketplace information current when income, household circumstances or employer-coverage eligibility changes. source
This makes accurate communication especially important. A benefits team should give employees clear offer documentation and direct them to the Marketplace’s eligibility process. It should not promise that declining the employer offer automatically preserves a subsidy.
A practical employee checklist
- Keep the ICHRA offer, allowance and relevant coverage dates.
- Identify the exact individual plan and its HSA treatment.
- Confirm which expenses the HRA is permitted to reimburse.
- Evaluate premium-tax-credit eligibility with the employer offer disclosed.
- Report material changes and retain the records needed for tax reconciliation.
This is an explanation of the reviewed federal guidance, not an individualized tax determination. For an employee, the useful output is a clear set of facts to confirm before enrollment and contribution decisions.
Keep the plan year visible
Do not carry a 2026 percentage into a 2027 worksheet. Our separate 2027 affordability guide explains the next plan-year percentage. Our employee guide walks through the broader coverage decision.
Sources and evidence
Review dates are recorded for each source above. Company pages are useful for confirming how a product is described, but they do not prove service quality or customer results.