A health reimbursement arrangement, or HRA, is not health insurance. It refers to a legal arrangement between an employer and their employees to reimburse for medical expenses and/or health insurance premiums on a tax-free basis. The individual coverage HRA (ICHRA) is one of only two types of HRAs (the other is QSEHRA) which allows employers to reimburse employees tax-free for qualified individual insurance premiums.
Under these arrangements, employees purchase their own health insurance on the open market and then submit claims to their employer to get reimbursed.
The ICHRA requires employees and their dependents to be enrolled in a qualified health plan for each month the employee and their family members are reimbursed through ICHRA. While there are several ways to meet this requirement, not all health plans can be integrated with ICHRA.
What qualifies as ICHRA health insurance?
The most important thing for employees to do to use a company ICHRA plan is to sign up for a qualified health plan, which basically means it provides coverage of essential benefits such as preventative and wellness services and emergency services, as well as limits on cost-sharing.
The following plans can be integrated with ICHRA.
- Major medical plans purchased on the exchange (This post explains what the Bronze, Silver, and Gold tiers mean.)
- Medicare - Part A - "Hospital insurance" covers costs from the hospital for free and acts as "classic Medicare." It's considered a major medical insurance plan that everyone is required to have.
Part B - "Medical insurance" that covers 80% of approved doctor visits and outpatient procedures after annual deductible is met. Also considered major medical and a requirement.
Part C - This is considered supplemental insurance or hospital and doctor coinsurance. Cost depends on the plan you select.
Part D - "Prescription insurance" helps you pay for your prescriptions. Pricing depends on the plan you select and your income. This is not considered a major medical plan or sufficient to meet minimum essential coverage requirements.
- Catastrophic Plans (limited to those under age 30 or must qualify for hardship exemption)
- Student Health Insurance
Read up on plans that integrate with ICHRA in our ICHRA compliance post.
What doesn’t qualify as ICHRA health insurance?
- Sharing ministries, such as Medi-Share, do not qualify.
- Individual coverage integration unfortunately does not include coverage on a spouse’s insurance plan.
- Short term plans can not be integrated with ICHRA, but they do work with EBHRA.
- ICHRA cannot be integrated with Tricare.
How do I buy ICHRA health insurance?
Employees offered the Individual Coverage HRA qualify for a Special Enrollment Period upon the initial offering. This gives employees 60 days from the date that they become eligible for the ICHRA to purchase a qualifying plan outside the normal open enrollment period (open enrollment typically runs Nov 1-Dec 15 nationwide).
Take Command Health is here to help you set up an ICHRA
With the ability to compare plans based on preferred doctors and prescription coverage, buying a plan has never been easier. We've also written a comprehensive guide with pretty much everything you'll ever need to know. Employees covered by an HRA can Shop for individual plans directly through Take Command Health with the help of our dedicated enrollment team. Employers interested in structuring coverage or comparing options can talk with an expert and get started with a custom design in minutes.