Here’s your comprehensive guide to understanding the differences between Individual Coverage Health Reimbursement Arrangements (ICHRA) and other health providers.

To fully appreciate the unique position of ICHRA, it’s helpful to compare it with other common health benefit arrangements. Each option serves different purposes and is suited for different employer and employee needs.

ICHRA vs. Traditional Group Health Plans

This is the most direct comparison, as ICHRA often serves as an alternative to a traditional group health plan. Unlike group plans, ICHRA shifts the choice and responsibility for plan selection to the employee, while the employer controls the contribution amount. Group plans offer a pre-selected benefit with shared risk.

ICHRA vs. QSEHRA (Qualified Small Employer HRA)

QSEHRA is another type of HRA, specifically for small employers. These allow employers to reimburse employees for health expenses. However, these plans come with strict allowance limits and broad employee offering requirements. Unlike QSEHRA, ICHRA is for any size employer, offers greater flexibility in allowance amounts/employee classes and has different rules regarding premium tax credits.

ICHRA vs. HRA (General Health Reimbursement Arrangement)

It’s important to clarify that ICHRA is a type of HRA and HRAs are a broad category of employer-funded accounts that reimburse employees for medical expenses. However, ICHRA has a primary focus on reimbursing individual health insurance premiums.

ICHRA vs. HSA (Health Savings Account)

HSAs are employee-owned savings accounts for healthcare expenses, often paired with high-deductible health plans (HDHPs), offering long-term savings potential. Whereas ICHRA is an employer-funded reimbursement arrangement for premiums and expenses. It’s important to note, an employee with an ICHRA can choose an HDHP and open an HSA, using the ICHRA to cover premiums and the HSA for out-of-pocket costs, making them complementary.

For more information about ICHRA or to walk through your health plan options, call us at 1-888-844-5809 (TTY: 711) or visit the links below based on your needs.

Keep reading about ICHRA for Employers.