ICHRA

ICHRA (Individual Coverage HRA)

As of January 2020, employers now have a new alternative 
to traditional group health plan coverage. 



ICHRA





A new way for employers to offer group health benefits.



Important Features for Employers and Employees

  • ICHRA may be offered to employees by an employer as an alternative to traditional group health plan coverage.
  • An offer of an Individual Coverage HRA counts as an offer of coverage under the employer mandate.
  • No minimum employer contribution requirement.
  • No minimum employee participation requirement.
  • ICHRA allows employers to potentially save significantly on cost while still providing robust health benefit options to their employees which in turn can provide the employees an opportunity to save on their personal medical out-of-pocket responsibilities.
  • The HRA rule may help small, midsize and large businesses.



What is ICHRA?

Per IRS HRA FAQs:



New rules released by the Department of Labor, Health and Human Services and the Treasury permit employers to offer a new "Individual Coverage HRA" as an alternative to traditional group health plan coverage beginning January 1, 2020, subject to certain conditions.



An Individual Coverage HRA is an arrangement under which an employer reimburses employees for medical care expenses (and sometimes the employees' family members' medical care expenses), up to a certain dollar amount for the plan year.



Individual Coverage HRA's can enable businesses to focus on what they do best - serve their customers - and not on navigating and managing complex health benefit designs. Individual Coverage HRA's provide tax advantages because the reimbursement provided to employees do not count towards the employee's taxable wages.



The HRA rule will provide hundreds of thousands of businesses a better way to offer health insurance coverage and millions of workers and their families a better way to obtain coverage. The HRA rule will especially help small employers who face larger administrative costs from offering a traditional group health plan, compete for talent.



An employer can contribute as little or as much as they want to an Individual Coverage HRA. However, large employers must still satisfy the affordability rule in order to avoid the employer mandate. 





For more information or to determine whether ICHRA is right for your business, contact us today. 832-781-1566.


Reduce Costs

ICHRA allows potential cost savings for both the employer and employee. Employers have the opportunity save an administrative costs as well as overall health benefit costs. Employees also have the opportunity to save on health benefit costs, from monthly fees to out-of-pocket responsibilities.

More Benefit Options

ICHRA allows employers to potentially offer multiple types of benefit options  and solutions, allowing a more customized approach to health benefits. Employees can select options that suit their financial and medical needs and the needs of their families more precisely.

Relaxed Rules

ICHRA does not carry the same minimum employer contribution rules nor minimum employee participation rules that traditional group health solutions come with. These relaxed rules eliminate much of the stress and hardship for employers associated with offering health benefits. 

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