Individual Coverage Health Reimbursement Arrangement (ICHRA) - New Health Insurance Option for Employers

Professional Actuarial Topics Health/Disability
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These move people to the Individual Exchange from Employer Sponsored plans. The Employer still subsidizes. Both EE and Employer get tax advantages. Seems to replace the HRA in some respects.

2020 saw the start of these companies
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The ICHRA is a popular solution for businesses that want to offer more personalized health benefits to employees. They provide cost control for employers and flexibility for employees. Instead of breaking the bank with a pricey group health plan, you can reimburse your eligible employees for the cost of their own individual health insurance plans.

With this employer-funded health benefit, you set a monthly allowance for your employees to use for their healthcare needs. Then, you reimburse them tax-free for more than eligible medical expenses, including their health insurance premiums. There’s no limit on employer contribution amounts, so you can offer your employees as much as you’d like. Plus, you can vary allowances and eligibility using 11 different classes of employees, such as full-time and part-time employees.

The ICHRA also gives employees more freedom. They can choose the medical plans that work best for them instead of getting stuck with traditional group benefits that they have no say over. Eligible employees need qualifying forms of individual health insurance coverage to participate in the ICHRA. They can purchase qualified plans on the Health Insurance Marketplace or from a private exchange.

Companies in existance:
Remodel Health
PeopleKeep
Thatch
Gravie

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Advantages:

Employer:

Employee:

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Disadvantages:

Employer:

Employee:

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Seems like a scheme to get the chronically ill employees/employees wirh chronically ill dependents off the books and then not cover the stuff they are most likely to need.

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A positive for the Employer for sure.

Employer can also control the $amount they put towards employee health costs way better

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It’s basically exhibit A in why we need to decouple health care from employment.

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