General InfoHealth

The Basics of Individual Coverage Health Reimbursement Arrangements (HRA)

Individual Coverage Health Reimbursement Arrangements For Businesses In NC

A Health Reimbursement Arrangement (HRA) is a type of account-based health plan that employers can use to reimburse their employees for medical expenses. It’s important to have a basic knowledge of the new HRA’s so you can make informed decisions as you navigate your health care options during each Open Enrollment period. Carolina Insurance Professionals provides ICHRA options for businesses in North Carolina. Let’s explore the ins and outs of the HRA options found in the Healthcare Marketplace.

What are the ICHRA health insurance basics?

Over the summer of 2019, the US Departments of Health and Human Services, Labor, and Treasury issued new rules on HRAs that transformed how employers pay for their employees’ health care coverage. Now, employers of all sizes that do not offer a group coverage plan are allowed to fund a unique kind of Health Reimbursement Arrangement. ICHRA is a special type of HRA arrangement for individual coverage.

Employees can use these ICHRAs to buy individual market health insurance. This includes health insurance purchased via public exchanges and is a result of the formation of the Affordable Care Act (ACA).

What are the benefits of ICHRA plans?

  • Employers can provide their employees and the employee families with tax preferred funds to pay a percentage of the cost of health coverage for purchasing health plans in the individual market.
  • Approximately 800,000 employers offer individual coverage HRAs to almost 11 million employees. As a result, a large population of employees have more options for health insurance coverage.
  • Smaller US employers especially benefit from these ICHRA options and can offer more insurance options to employees. Smaller businesses can now afford to compete with larger corporations that historically have more extensive health insurance packages.
  • Employers have flexibility in how to structure their ICHRA offerings.

Bottom line: Workers can use individual coverage HRA’s to purchase their own health plans through the Marketplace. Through this system, employer’s pre-tax dollars subsidize their employees premiums in the Health Insurance marketplace.

Contact Carolina Insurance Professionals for further information about your ICHRA options!