BENEFITS OF AN ICHRA
What is an ICHRA?
An ICHRA is the next generation of employer-sponsored health care coverage. Now, employers of any size can make contributions to employees for major medical and Medicare premiums on a tax-advantaged basis with no caps on the reimbursement amount.
ICHRAs are different from traditional group health insurance plans because it allows employers to define a monthly allowance for each employee, which the employee can use to purchase individual health insurance coverage that fits their needs. ICHRAs provide employees with flexibility and portability, as they can keep their coverage even if they change jobs.
Employers initiate the ICHRA plan, determine the amount of their contributions and establish the specific eligibility criteria. The contribution amounts can vary based on factors such as age, enrollment tier and geographic location. ICHRAs are available to employers of all sizes. By offering an ICHRA, employers can provide a health benefit to their employees while stabilizing costs and customizing the benefits to individual employee needs.
It works in three easy steps.
- An employer creates an annual contribution budget for employees.
- Employees choose the health plan that is right for them and their budget.
- The employer reimburses employees for the premiums.
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Advantages for you and your employees
Cost-effective and flexible employee benefits solution: Predictable, low-cost, and ACA-compliant with simplified renewals.
- Budget friendly – predictable costs, less volatile than traditional group insurance
- No more difficult and complex decisions at renewal time – less onerous planning process
- No minimum employee participation requirements
- Flexibility in benefits among employee classes
- Fully compliant with all ACA mandates to avoid penalties
A wide array of health care plans with budget-friendly options, tax advantages, and seamless portability for employee flexibility.
- Employees select a plan that fits their own needs – from deductibles to doctors, employees decide what’s right for them
- Employees select a plan that fits their monthly budget
- Employees continue to benefit from the tax advantages they have today, just like traditional group health insurance
- Portability – employees may keep their policy if they retire or change jobs
