Individual Coverage Health Reimbursement Arrangements (ICHRAs) and Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) are both types of employer-funded health reimbursement arrangements, but they are designed for different employer needs and have distinct rules and features. ICHRAs are suitable for businesses of any size and allow employers to reimburse employees…
ICHRAs
Are there contribution limits for employers providing ICHRAs?
There are no upper limits on the amount an employer can contribute to an ICHRA. Employers have full discretion to set the allowance amounts, which can vary based on employee class and family size. However, any reimbursement from an ICHRA must be solely funded by the employer, with no employee…
Can employers offer ICHRAs to all employees?
Employers have the flexibility to offer ICHRAs to certain classes of employees while providing different benefits, such as group health insurance, to others. However, they must adhere to certain employee classification rules to avoid discrimination. These classes can be based on job categories, geographic location, full-time vs. part-time status, and…
What are the eligibility requirements for an ICHRA?
To be eligible for an ICHRA, an employee must be enrolled in individual health insurance coverage or Medicare. This includes plans purchased on the health insurance marketplace, Medicare Part A and B, or Medicare Part C. Employees covered by a spouse’s group plan or through another group health plan are…
How do ICHRAs differ from traditional HRAs?
ICHRAs differ from traditional HRAs in several key ways. Traditional HRAs are typically offered in conjunction with a group health insurance plan, while ICHRAs are used exclusively with individual health insurance plans. ICHRAs offer more flexibility, allowing employees to select a health insurance plan that best suits their needs from…