An Individual Coverage Health Reimbursement Arrangement (ICHRA) is the newest standalone HRA that enables employers of all sizes to reimburse employees, tax-free, for individual health insurance premiums and potentially other qualifying medical expenses. Here's a handy guide to see if ICHRA is a good fit for your client.
ICHRAs are quickly becoming one of the fastest-growing forms of employee benefits in the U.S., so many employers want to know if ICHRA is a good fit for their company. It’s time to start discussing ICHRAs with your clients; we can help!
Take Command helps your clients and their employees find, purchase, and manage affordable alternatives to small group insurance on the individual health insurance marketplace.
Our end-to-end platform simplifies and streamlines the entire process. Your client is supported by world-class industry experts every step of the way.
ICHRA is a great fit for the modern, mixed workforce because it allows your client to provide health coverage for various employee types (classes), such as part-time and seasonal workers and remote workers. If your client has a mixed workforce or is in one of the following industries, they could be a good fit for ICHRA.
If your client has the following workers, they could be a great fit for ICHRA.
NOTE: Each class can be divided further by age and the number of dependents.
Industries with high turnover, short employee tenure, populations of lower-paid workers, or a mix of hourly and salary employees tend to be a good fit for an ICHRA plan.
A good fit for HRAs | Not a good fit for HRAs |
First time to offer health benefits | Employees qualify for large premium tax credits |
Want more flexibility, simplicity, customization | Employer offers a group plan that all employees love at the right price |
Did not qualify for group coverage | Single member S-Corp |
Need to control budget | |
Looking for tax-friendly benefits | |
Don't want to manage risk of group plan | |
Currently increasing salaries or offering health stipends | |
Participation concerns or trouble insuring remote or part time workers |
When you want to transition your client to a new benefits model, it’s important to highlight the benefits for them and their employees. Here are some key talking points you can use.
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