Who is Responsible for Employee Health Plan Payments?

Overview

Under an Individual Coverage Health Reimbursement Arrangement (ICHRA), employees are directly and solely responsible for selecting, enrolling in, and paying for their own individual health insurance coverage. StretchDollar serves as the administrative platform through which employers provide tax-advantaged reimbursements to employees — it is not an insurance carrier, payment processor, or payor on behalf of employees.

Employee Responsibility for Health Plan Payments

When your employer establishes an ICHRA benefit, you are responsible for independently obtaining and maintaining your own health insurance. This means:

• You must select a qualifying individual health insurance plan directly through a carrier, broker, or the Health Insurance Marketplace.
• You are responsible for paying your monthly premium directly to your insurance carrier by the carrier’s stated due date.
• Failure to make timely premium payments may result in a lapse or cancellation of your coverage — StretchDollar has no ability to prevent or reverse such actions.
• Your coverage and its continuation are between you and your insurance carrier. StretchDollar is not a party to that relationship.

It is important to understand that your employer does not pay your insurance premiums on your behalf under an ICHRA. Your employer provides a monthly allowance — administered through StretchDollar which you may use to seek reimbursement for the premiums you have already paid out of pocket.

The Role of StretchDollar

StretchDollar is a reimbursement administration platform. Its function is limited to facilitating the ICHRA reimbursement process on behalf of your employer. Specifically, StretchDollar:

• Administers the employer’s ICHRA plan and tracks allowance balances.
• Reviews and processes employee-submitted reimbursement requests for qualifying health insurance premiums and medical expenses.
• Disburses approved reimbursements to employees after expenses have been incurred and verified.
• Provides a portal for employees to submit documentation and track reimbursement status.

Important:  StretchDollar reimburses employees for expenses already paid — it does not make payments to insurance carriers on an employee’s behalf at any time.

How the Reimbursement Process Works

The reimbursement flow under an ICHRA through StretchDollar follows these steps:

• Step 1 — The employee pays their health insurance premium directly to their carrier.
• Step 2 — The employee submits a reimbursement request through the StretchDollar portal, including documentation of the payment (e.g., premium invoice or proof of payment).
• Step 3 — StretchDollar reviews the submission to confirm eligibility under the employer’s ICHRA plan.
• Step 4 — Upon approval, StretchDollar disburses the reimbursement to the employee, up to the available allowance balance.

This process confirms that StretchDollar’s involvement begins only after the employee has already made their premium payment. There is no scenario in which StretchDollar remits funds directly to an insurance carrier on behalf of an employee.