Cost containment strategies are more critical than ever as healthcare costs are anticipated to rise even higher due to COVID-19.

Today, we’re taking a deeper look at Individual Coverage HRAs, or ICHRAs. Let’s dive in.

What’s an ICHRA again?

An ICHRA, or Individual Coverage Health Reimbursement Arrangement, is an employer-management reimbursement program that can take the place of group-sponsored coverage. This arrangement is used to reimburse employees for eligible healthcare expenses.
Instead of offering an employer-sponsored plan, employers can offer an ICHRA as a way to set aside pre-tax dollars to reimburse employees for individual health insurance premiums and other eligible health care expenses.

ICHRAs are considered a form of minimum essential coverage and could be an option for employers looking to provide their employees with more flexibility around affording healthcare while still managing the bottom line.

You can find the full ruling here.

What makes ICHRAs so cost-effective?

  • Employers can set aside funds to reimburse healthcare premiums and other expenses for employees that aren’t on their group plan.

  • The employer doesn’t have to deal with skyrocketing premiums but can still help their employees get the healthcare they need through a reimbursement program.

  • Employers are able to set aside pre-tax dollars for eligible reimbursements, such as premiums and medications.

What’s the benefit for employers and employees?

  • ICHRAs could be an option for employers who are looking for alternatives to group-sponsored plans but may not be ready to go self-funded.

  • This health plan reimbursement structure allows employers to offer health care resources to their employees without taking on as much of the costs as a fully insured plan.

  • Employers are still able to offer benefits to employees who may not otherwise qualify for group-sponsored coverage, such as part-time or seasonal workers.

ICHRAs aren’t for everyone, but they can offer employers and their employees some flexibility in affording coverage that fits the needs of both parties, especially for employers who aren’t quite ready to shift to a self-funded option.

While Maestro Health doesn’t offer ICHRAs as part of our benefits solutions, we can help employers control healthcare costs and navigate the system with our self-funded solutions. Get in touch with us to learn more.

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