ResourcesSmall Business Health Care Hub by JPMorganChase
Discover new HRA options
Health Reimbursement Arrangements (HRAs)—including the new ICHRA—are a great way for you to assist your employees in purchasing their own health insurance using pre-tax money.
These plans help make costs predictable, reduce expenses, and offer employees maximum choice.
A flexible option for businesses
HRAs allow businesses to use pre-tax funds to reimburse employees for individual health plans, rather than group plans. This ensures predictable costs and reduced overhead, making it ideal for small and medium-sized businesses seeking stability.
Maximize employee choice and make costs predictable
What are ICHRAs and QSEHRAs?
These health plans allow businesses to assist employees in paying for medical expenses, including health insurance, using pre-tax money. QSEHRAs are tailored for small businesses with fewer than 50 full-time equivalent employees, while ICHRAs can be offered by employers of any size.
How do they work?
Instead of choosing a health plan for everyone, you give a set amount of money to employees. Employees then pick the health plan that suits them best.
Key points
-
Who chooses the plan?
Employees select and buy their own insurance. -
Flexibility
Employees can choose the plan that fits their needs. -
Benefits for businesses
Costs are predictable because businesses set a fixed contribution amount. -
Considerations
Employees might need time to adjust to choosing their own plans, and costs can vary by state, so it’s important to check local options.
Find the HRA that aligns with your employees’ needs and your business goals
- ICHRA: Individual Coverage Health Reimbursement Arrangement
- QSEHRA: Qualified Small Employer Health Reimbursement Arrangement
| Attribute |
ICHRA
Individual Coverage Health Reimbursement Arrangement
|
QSEHRA
Qualified Small Employer Health Reimbursement Arrangement
|
|---|---|---|
| Employer size | Businesses of any size | Small businesses with fewer than 50 employees |
| Plan design flexibility | Allows tailoring of benefits to different employee classes | Offers uniform benefits to all eligible employees |
| Budget | No specific contribution limits, offering more flexibility | Annual contribution limits set by the IRS for predictable budgeting |
| Administrative complexity | More complex due to possibility for customization | Simple compliance requirements with less administrative burden |
| ACA employer mandate | May satisfy the ACA employer mandate for businesses with more than 50 FTEs if coverage is affordable and the employer offers coverage to more than 95% of FTEs | Not available for businesses with more than 50 FTEs (only applicable large businesses are subject to the ACA employer mandate) |
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