Answers to your Frequently Asked Questions Regarding ICHRA
What is ICHRA Administration?
ICHRA administration refers to the management of reimbursements, compliance, and employee communications related to an ICHRA plan. Many employers use a third-party administrator to handle these functions for efficiency and compliance.
Where did ICHRA come from?
For years, HRAs had been a popular solution for businesses who wanted to reimburse their employees’ healthcare expenses. The Affordable Care Act (ACA) changed that, significantly limiting a business’s ability to offer HRAs for individual policies.
In 2017, an Executive Order was issued directing the Departments of Treasury, Health and Human Services, and Labor to expand business’s use of HRAs once again. In June of 2019, new rules were released, establishing ICHRA as an option for 2020.
What are the Benefits of ICHRA Administration?
Third-party administration helps employers stay compliant, manage reimbursements, and simplify the employee experience. Admins handle documentation, reporting, claims processing and remittance of reimbursements.
How does ICHRA Administration Work?
Employers set reimbursement amounts and define eligibility. Employees purchase their own health plans and submit proof of expenses. Employers (or a third-party administrator) review and approve reimbursements according to plan guidelines.
Is ICHRA Administration a compliant solution?
Yes, when properly designed and administered, ICHRA complies with IRS, ACA, and ERISA regulations. Using a third-party administrator ensures compliance and simplifies documentation requirements.
Can I choose which individual policies are approved?
No. As part of the ICHRA ruling, employers implementing an ICHRA cannot take part in, or influence, which health insurance their employees purchase.
Why choose ICHRA over traditional group insurance?
It’s simple. ICHRA Administration puts cost control back in the employer’s hands and puts the choice of health coverage in the employee’s.
What is ICHRA?
ICHRA stands for Individual Coverage Health Reimbursement Arrangement and is a ruling brought down by the Departments of Treasury, Health and Human Services and Labor which allows for and provides guidance to employers wishing to reimburse money toward Individual Health Insurance premiums as well as specific Excepted Benefits.
Who can offer an ICHRA?
Any employer of any size can offer an ICHRA, regardless of industry.
What can an ICHRA pay for?
Employers have a great deal of flexibility in what their money can be used for, and the dollar limits. For example, an employer can offer money toward individual premiums, specific out of pocket expenses, or both. There are compliance considerations to each so contact us for details regarding compliance and plan design considerations.