You probably remember the old adage from your school days, “If you have a question, ask it! Chances are, you’re not the only one who’s curious.” So when we were recently asked about integrating TRICARE (which is a type of insurance program available to military personnel, retirees, and their dependents) with an individual coverage health reimbursement arrangement (ICHRA), we figured we would share our knowledge.
In case you’re not familiar yet, ICHRA is coming in 2020, and it allows employers to reimburse their employees tax-free for individual insurance and medical expenses. While we are still building our tools and platform for this new tax-advantaged HRA, we are fielding lots of questions from business owners, benefits consultants and brokers (our list of ICHRA FAQs is growing at rapid speed!).
Ok, back to TRICARE. Here’s what we found out.
TRICARE individuals will have to purchase a separate ICHRA-compliant plan from the individual marketplace to participate in ICHRA. While some TRICARE plans meet Minimum Essential Coverage, an individual plan must still be purchased to be eligible.
However, nothing prevents an employer from offering an ICHRA to an individual covered by TRICARE under these conditions:
- The ICHRA must be offered to all employees in the same class of employees as the individual
- All individuals covered by the ICHRA must be enrolled in either individual health insurance coverage or Medicare (in other words, individuals may not be enrolled in ICHRA and TRICARE only)
An HRA may be available to pay both the premiums and cost-sharing for individual health insurance coverage as well as any medical care expenses related to TRICARE, subject to the terms of the HRA.
But remember, an individual plan would have to be purchased for an individual to receive benefits from their employer's ICHRA. A MEC-compliant TRICARE plan isn't enough on its own.
Are you considering an Individual Coverage HRA for your business (or your client's business) in the coming months? Or are you currently on TRICARE? If so, you'll need to purchase an individual plan to be eligible for the benefits of ICHRA. You'll just have to weigh the benefits of purchasing another plan vs. the reimbursements of the HRA to decide what's best for your family.
If HRAs are new territory for you (we're guessing that's most of you!) or if you need our team to help onboard your clients, we are here for you. We have a lot of exciting tools in the pipeline that will make this process as simple as possible.