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ICHRA for GovCon

Healthcare stops being a risk. It becomes a fixed number.

ICHRA is one of  the newest and most powerful ways to give your employees quality healthcare while maintaining full ACA compliance and controlling costs with fixed, predictable contributions that make bid forecasting easier. CVRD is the only platform that makes it work for government contractors.

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Why ICHRA works for GovCon

ICHRA converts healthcare from a variable cost into a fixed, predictable input capped at exactly the fringe rate. You never spend more than what you are already obligated to pay.

Why generic ICHRA vendors fail on SCA accounts

  1. Fringe moves, standard ICHRA doesn't.

    SCA H&W is earned per hour at rates that vary by wage determination. A standard ICHRA is a fixed monthly premium. When fringe falls short, non-SCA platforms can't reconcile what was already sent to the carrier.

  2. Cash-in-lieu gaps aren't handled.

    When fringe exceeds premium, the gap is a taxable wage that must go through payroll. Generic ICHRA vendors don't calculate or deliver it.

  3. Bona fide benefit status (29 CFR 4.171).

    Requires the arrangement to be structured to SCA. If it isn't, the fringe isn't creditable and the employer owes the full amount as cash wages, retroactive.

  4. Excess fringe constitutes plan assets.

    Excess fringe in an HRA sub-account or carryover balance legally requires a trust. CVRD uses an SCA-friendly design specifically to avoid this.

  5. SCA requires per-employee, per-contract records.

    A non-SCA platform only sees the ICHRA piece. The rest of the compliance record doesn't exist.

  6. Two vendors means double the work.

    Running ICHRA through one vendor and ancillary/401(k) through another means two logins, two reconciliations, and manual spreadsheet work every pay period.

Compliance requirements

  • Employee notice
  • Substantiation of coverage
  • Affordability testing
  • Opt-out mechanics
  • Class rules (mixing ICHRA + group plan)
  • ACA reporting
This isn't a light-admin product. Implementation quality is everything.

Case study

$536,870
Saved in year one
Federal services contractor
A 151-person SCA contractor moved to ICHRA with CVRD and cut spend without cutting coverage.
  • 52%
    Weighted avg monthly premium savings
  • 61% → 72%
    Employer contribution % (spend down 30%)
  • 30%
    Total monthly spend dropped

FAQs

Can't find what you're looking for?
We're happy to help.

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Can our H&W fringe legally fund an ICHRA?
Yes. An ICHRA is an employer-sponsored, ERISA-covered group health plan, which is what makes it a bona fide fringe benefit under 29 CFR 4.171. Contributions credit against your H&W obligation the same way a group premium contribution does. What matters is that the arrangement is structured for SCA and that every contribution is documented against hours worked on the covered contract. That's the part we own.
Do we have to move everyone, or can we run ICHRA alongside a group plan?
You can run both. ICHRA and group coverage sit side by side across different employee classes (the same class can't be offered both), which is common when a prevailing wage population and a salaried population have genuinely different needs. The class rules that keep this compliant are specific about who can be offered what and on what basis, so we build the class structure with you rather than handing you a configuration screen.
We've heard mixed things about ICHRA. What do people actually get wrong?
Most of what contractors have heard is secondhand, and the most common misread is that ICHRA means handing employees cash and stepping back. It's an employer-sponsored plan where employees choose from ACA-regulated individual market plans. That usually means many more options than a single group plan offers, and coverage that follows the person rather than the job site. The second misread is assuming a bad ICHRA experience means the model doesn't work; far more often what failed was the implementation or the prior administrator.

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