There are many advantages to running your own business: being your own boss, setting and achieving lifelong goals, doing what you love. That's probably why more than 27 million Americans have decided to become entrepreneurs. But as exciting as it can be to start your own small business, you’ll also face many challenges.

If you run a small business with one employee, you might think you can’t afford health insurance. Happily, this doesn’t have to be the case. Whether you plan to stay solo or you’d like to grow, you have several options for small business health insurance.

When it becomes available in January 2020, the individual-coverage health reimbursement arrangement (ICHRA) will be one of the most valuable alternatives to group health insurance open to businesses.

With the ICHRA, businesses of any size can reimburse employees tax-free for medical care. The ICHRA also allows businesses to make distinctions in eligibility and allowance amounts among employees based on certain characteristics.

In many ways, the ICHRA is the closest restoration of the old stand-alone HRA since IRS interpretation of the Affordable Care Act limited HRAs in 2013.

The ICHRA isn’t without its drawbacks, though, and the benefit may not be the best fit for all businesses.

In this post, we’ll review how the ICHRA works as well as ICHRA pros and cons you should consider while evaluating the benefit.

Let’s dive in.

When it becomes available in 2020, the individual coverage health reimbursement arrangement (ICHRA) will be the latest in IRS-approved health benefits.

With the ICHRA, businesses can reimburse employees for their health care expenses, including individual health insurance. The business offers employees a monthly allowance amount, employees buy the health care that fits their personal needs, and the business reimburses them tax-free up to their allowance amount.

If that sounds familiar, it may be because the ICHRA resembles another HRA: the qualified small employer HRA (QSEHRA).

Introduced in January 2017, the QSEHRA was the first HRA in many years to allow small businesses to offer formal, tax-advantaged health reimbursement to all of its employees. Since its creation, the QSEHRA has helped thousands of businesses offer health benefits when they were otherwise unable to.

Now, businesses can choose between the two. Which is the right choice: the QSEHRA or the new ICHRA?

In this post, we’ll help you decide by walking you through the main differences between the two HRAs. We’ll also provide you with a chart to digest the information more quickly.

Let’s get started.

Small business health insurance is getting more expensive every year. A popular and effective way to avoid these costs is to cancel group coverage and reimburse employees for individual health care expenses instead.

With a reimbursement benefit, small businesses can decide how much they want to spend toward their employees’ health care. They can also avoid the cumbersome administrative requirements of group benefits.

But with health care policy perpetually changing, it’s hard for small businesses to keep track of which reimbursement benefits are compliant and which aren’t.

In this post, we’ll go over the latest federal guidelines to help you understand your options for health insurance reimbursement in 2019.

One advantage of the qualified small employer health reimbursement arrangement (QSEHRA) is that employee spouses can receive value from the benefit regardless of their situation.

Though spouses don’t receive their own monthly allowance amount, they can submit their personal expenses for reimbursement through the employee’s allowance. Spouses also qualify for the QSEHRA’s tax benefits as long as they’re covered under a major medical policy.

There are rules that apply to spousal reimbursement, though. In this post, we’ll explore how the QSEHRA works for spouses and how businesses, their employees, and employee spouses can stay in compliance when using the benefit.