Switching from a traditional group health plan to ICHRA (Individual Coverage HRA) gives a Florida small business defined-contribution cost predictability and lets employees pick from a wider variety of individual ACA marketplace plans. The transition requires a 90-day employee notice, careful timing with the existing group plan termination and ACA marketplace open enrollment, and a written ICHRA plan document. Done right, the switch can lower employer cost 10-20% while improving employee plan choice.
ICHRA regulations require employers to provide at least 90 days advance written notice to employees before the start of each ICHRA plan year. Notice must include:
The termination of an employer's group health plan is a qualifying life event giving employees a 60-day SEP to enroll in individual ACA marketplace coverage. This SEP is what makes the switch possible — without it, employees would have to wait for marketplace open enrollment (Nov 1 – Jan 15).
| Days Before ICHRA Plan Year Start | Action |
|---|---|
| 120-150 days before | Decide on ICHRA design (contribution amounts, classes); select platform vendor |
| 90-100 days before | Distribute required ICHRA notice to employees |
| 60-90 days before | Group plan termination notice to carrier |
| 45-60 days before | Employee education on individual marketplace shopping |
| 30-45 days before | Employees enroll in individual plans; submit proof to ICHRA admin |
| 0-30 days before | Group plan terminates last day; ICHRA effective day 1 |
Most Florida small businesses align ICHRA plan year with calendar year (January 1) because:
If your existing group plan year is mid-year (e.g., July 1), you may run a short plan year to align, or wait until July 1 of the next year for ICHRA start.
Sample 10-employee Florida business switching from group at $525/EE/mo to ICHRA at $475/EE/mo:
| Item | Annual |
|---|---|
| Old group plan employer cost | $63,000 |
| New ICHRA contributions ($475 × 10 × 12) | $57,000 |
| ICHRA admin platform ($6/EE/mo) | $720 |
| Total ICHRA-year cost | $57,720 |
| Annual savings | $5,280 (8%) |
COBRA generally doesn't apply to small employers under 20 EE. For larger groups, terminating the underlying group plan eliminates the COBRA continuation right (you can't continue a plan that no longer exists). FL mini-COBRA also typically ends with plan termination.
Florida ACA marketplace has multiple carriers in most counties. If no plan works for a specific employee, ICHRA cash isn't usable (employee must have qualifying coverage). Most employees find suitable plans, but the transition is harder for employees with very specific provider needs.
Yes — Section 45R credit eligibility is based on premium paid for employee coverage, including ICHRA reimbursements. The same FTE/wage/SHOP requirements apply. ICHRA reimbursements counted as 'premium' for credit purposes.
A licensed Florida broker can plan the transition timeline and select an ICHRA platform.
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