Why your ICHRA policy can't change during the plan year

Your ICHRA policy is set before your plan year starts, and it stays the same until your next renewal. That includes your employee classes, your family scaling and your contribution amounts. Changes to your policy can't be made partway through the plan year.

What stays fixed for the plan year

Employee classes: the groups of employees you offer the benefit to, such as full-time, part-time, salaried or hourly, and who is eligible in each.
Contribution amounts: the monthly allowance you give each class.
Family scaling: whether and how the allowance goes up when an employee covers a spouse or children.
Contribution type: a flat rate or Smart Rates (amounts that vary by age). This can only change at renewal.
Waiting period: how long new hires wait before their benefit starts.

Why the policy can't change mid-year

An ICHRA is a regulated health benefit, and federal ICHRA rules shape how it has to be offered. To stay compliant, StretchDollar sets your policy before the plan year begins and keeps it fixed until renewal. Here's why that matters:

Everyone in a class gets the same terms. ICHRA rules require you to offer the benefit on the same terms to every employee in a class. The only differences allowed are by age (Smart Rates, up to 3 to 1) and by number of dependents (family scaling). If you changed amounts partway through the year, employees in the same class would end up with different terms depending on when they joined or enrolled.
Your employees made decisions based on your notice. Before the plan year, each eligible employee receives an ICHRA notice that shows their allowance. They use it to choose a health plan, to decide whether to accept or waive the benefit, and to decide whether to give up any premium tax credit. Changing the terms afterward would undercut decisions they've already made.
Age-based amounts must be set in advance. Smart Rates are built partly on age-based scaling, and the way ages are used has to be decided before the plan year starts. That's why the contribution type can only change at renewal.

Decide these before your plan year starts

Because your policy is set for the whole year, take time to get these right when you build your policy or renew:

Your employee classes. Decide which groups of employees you'll offer the benefit to. If you have a mix of full-time and part-time employees, decide now whether both are included.
Your family scaling. Decide whether employees who cover a spouse or children receive more, and how much more.
Your contribution amounts. Choose an allowance you're comfortable funding for all 12 months. Most employers set it at or near the cost of a good individual plan in their area. See How to choose a benefits budget for your StretchDollar policy.

Not sure what to choose? Book time with our team before you finalize, and we'll walk through the options with you.

What you can still do during the year

These are everyday updates to your employee list, not changes to your policy, so you can make them at any time:

Add new hires. They get the allowance for their class once their waiting period ends.
Terminate employees who leave your company.
Move an employee to a different class you already offer when their job actually changes, for example from part-time to full-time. Their new allowance applies from that point forward.
Update an employee's number of dependents. Their allowance updates automatically using the family scaling you already set.

Need a change? Plan it for renewal

Renewal is the time to update your policy for the next plan year. We send renewal reminders starting in September, and the renewal period runs from October 15 to November 15. For the 2027 plan year, submit your changes by November 15, 2026 at 11:59 PM PT.

During renewal you can keep your policy as it is, take the recommended increase, or customize it, including your classes, contribution amounts, family scaling, waiting period, and switching between a flat rate and Smart Rates. If you don't make any changes, your policy renews automatically with the same terms. Learn more in How do renewals work?

If something has changed for your business that you think can't wait until renewal, contact us at support@stretchdollar.com. We'll review it with our compliance team, but we can't promise a change before your next renewal.

Common questions

Can I lower my contribution because our budget changed?

Not during the plan year. Plan the new amount for your next renewal so your employees know what to expect before they choose their health plans.

Can I add a new class partway through the year?

No. New classes take effect at renewal. During the year you can still add new hires to the classes you already offer.

My business started mid-year. When is my first renewal?

Your first plan year ends on December 31, so your first renewal is for the plan year that starts January 1.

Does this stop my employees from changing their health plan?

No. This applies to your company's policy. Employees who have a qualifying life event, such as a move, marriage or new baby, can still change their own health plan mid-year.