How ICHRA Affects Group Health Insurance

HomeBlogHow ICHRA Affects Group Health Insurance

It has been a full year since ICHRA was created on January 1, 2020. ICHRA stands for Individual Coverage Health Reimbursement Arrangements. It was created along with the Excepted Benefit HRA as two new types of HRAs. The ruling to create these was in response to President Trump’s executive order (E.O. 13813), “Promoting Healthcare Choice and Competition Across the United States.”

How ICHRA Affects Group Health Insurance

Before the ICHRA was created, employers could offer group health insurance and an HRA, but could not cover individual health premiums with the HRA. They could only have a Qualified Small Employer HRA if they had 50 or fewer full-time employees and did not offer group health insurance.

Employers can now fund an ICHRA for any employees who are not offered a group health plan, regardless of the size of the company, and there are no contribution limits (minimum or maximum). The caveat is that you cannot offer each employee a choice between an ICHRA and a group health plan. What you can do is have different employee classes and offer ICHRA to certain classes and group health insurance to others. Class difference examples include full-time vs. part-time, salaried vs. hourly, or regional differences. Since there are no minimum participation rates for ICHRA, it can be a great option for smaller companies that aren’t yet prepared to offer group health insurance.

If you would like to know more about group health insurance and how ICHRA affects it, reach out to us at Elite Benefits Group in Monroe, North Carolina. We are a valuable resource for information on individual health insurance, group health insurance, and life insurance. Call today to schedule a consultation.