Individual Covered HRA

ICHRAs are a type of Health Reimbursement Arrangement (HRA) that employers fund for their employees to purchase individual health insurance instead of offering a group health plan. With ICHRAs, employees can shop for affordable and personalized coverage through the individual health insurance market and use their CHRA funds to pay for part or all of their insurance premiums. Employers any size can offer ICHRAs to all or a subset of employees based on defined classes and class rules, and there is no limit on how much an employer can contribute.

About ICHRA

The ICHRA program is available to businesses of any size, with eligibility determined by employee enrollment in individual health insurance or Medicare Parts A, B, or C. Employee eligibility can be influenced by selecting which employees are offered the ICHRA, with those eligible for a traditional group health plan being ineligible. There is no contribution limit, with amounts varying based on employee age, number of dependents, and class. The carryover and eligible expenses are also unlimited and determined by the employer, with options to reimburse premiums and all (or certain) 213(d) eligible expenses or limit reimbursement.

Outline of Services

For Small Businesses:

As a small business owner, you face unique, including tight margins and the need to carefully manage costs. ICHRAs offer a solution by providing predictable, easy-to-budget healthcare for your employees. With ICHRAs, you can reduce the time and energy spent on administration, allowing you and your team to focus on growing your business and wearing many hats required in a business environment. Plus, ICHRAs can help you retain valuable employees by offering a competitive benefits package. Small businesses face a challenge in standing out in recruitment and retention by offering unique benefits. Since 2010, businesses with fewer than 200 employees have seen a of over 10 in providing health benefits. However, an ICHRA can be a cost-effective solution to support employees in covering healthcare expenses.

For Large Employers:

If you have a large workforce, healthcare costs can be unpredictable and difficult to manage. Group health coverage is subject to annual rate increases set by the insurance provider, leaving you with little control over your budget. However, with an ICHRA, you can set the terms of how much you'll fund your employees' healthcare and adjust contributions based on employee class, age, and family size. This can provide greater cost certainty, especially if you have a self-funded plan. By freeing up resources previously dedicated to administering employee benefits, you can focus on employee engagement and development, which can have a significant impact on your business.

For employers with 50-plus full-time employees:

If your company has 50 or more full-time employees, including full-time equivalent employees, in the previous, you are subject to the Affordable Care Act (ACA) employer. This means that you must offer minimum essential coverage to at least 95 percent of your full-time employees and their dependents. By an ICHRA, you fulfill the requirement of offering minimum essential coverage under the employer mandate. If you contribute a sufficient amount through your ICHRA that meets the affordability requirements of the ACA, you can avoid making any employer mandate payments required by the ACA.

Why ICHRAs are the Ideal Healthcare Solution for Employees

ICHRAs offer a personalized healthcare solution for employees, allowing them to select coverage that meets their specific needs. With declining of private-sector employers offering group health insurance, ICHRAs provide an opportunity for employers to support uninsured employees. Additionally, ICHRAs offer portability, allowing employees to retain their individual health insurance even if they change employers.

Where can individual health insurance be found by my employees?

Individuals have the option to purchase insurance coverage either from the government-run insurance marketplace or from a private insurance marketplace.

Is it possible to provide both ICHRA and group health insurance?

It is possible to provide both traditional group health insurance and an ICHRA however, it is not permissible to offer them to the same group of employees.

Can a spouse's health insurance cover an employee's participation?

The employee is eligible for the ICHRA if their spouse has individual health insurance. However, if the spouse is covered under an employer group health plan the employee is not eligible.

In Conclusion

The unpredictability of healthcare costs is a challenge for businesses of all sizes. ICHRAs are a new addition to the healthcare industry, and their impact is projected to be significant. As more employers seek ways to reduce risk and stabilize budgets while providing necessary healthcare and employee benefits, ICHRAs may be the solution. HRC Total Solutions, a third-party administrator, offers helpful tools, innovative technology, and responsive customer service to simplify employee benefits and allow businesses to focus on other areas.