New HRAs like the Individual Coverage HRA (ICHRA) and the Excepted Benefit HRA (EBHRA) have a lot of perks, but what if some of your employees would rather stay on the group plan they're accustomed to? Good news. You can offer both (just not to the same group of people). Here's how to do it.
Individual Coverage HRA and Group Plans
Unlike ICHRA's predecessor, QSEHRA, which prohibits employers from offering a group plan alongside the Qualified Small Employer HRA, Individual Coverage HRAs play well with group plans in certain circumstances.
Employers can offer an ICHRA and traditional group plan to employees as long as two conditions are met:
- Employees in each class are only offered one solution. For example, an employer cannot offer employees within a class an ICHRA and a group plan.
- Certain classes being offered reimbursement through an ICHRA must meet class size minimums. This is to avoid adverse risk shifting from employers trying to unload unhealthy risk off of their group plan and onto the individual market.
Say you want to continue your group plan with your full-time employees but want to offer an ICHRA for remote or hourly workers. ICHRA allows you do do that.
Excepted Benefit HRAs and Group Plans
There are some instances in which an employer may wish to offer an HRA in addition to the traditional group health plan, for example to cover the cost of copays, deductibles, or other costs not covered by the plan. Excepted Benefit HRAs allow for higher levels of employer contributions than flexible spending arrangements (FSAs) and the unused funds can rollover year to year.
While you can't reimburse for traditional insurance premiums, you can reimburse up to $1,800 for the following:
- Limited scope dental and vision insurance;
- COBRA continuation coverage;
- Short-term limited duration insurance (STDLI);
- Cost sharing (copays and deductible); and,
- Long-term care coverage, nursing home care, home healthcare, community-based care, or any combination thereof.
Pro-tip: Employees do not have to accept the employer sponsored group health plan in order to participate in EBHRA.
This is great news for employees who might not be able to afford the premiums under their group plan, as they will be able to purchase a short-term plan instead and use their EBHRA allowance to reimburse the premium.
Still have questions?
We are here to answer the questions you might still have about how these HRAs and group plans interact with one another. Click the chat button to talk to someone immediately! You can also check out this post, in which we compare ICHRA, EBHRA and group plans. Or peruse our comprehensive ICHRA guide