The Affordable Care Act’s (ACA’s) employer shared responsibility provision defines employers with an average of 50 or more full-time employees during the previous year as applicable large employers, or ALEs. They must offer minimum essential coverage to 95% or more of full-time equivalent employees and their dependents. They’re also required to provide coverage that provides minimum value and is affordable to all full-time employees. This requirement is called the employer mandate. 

According to the Affordable Care Act, applicable large employers (ALEs), those companies with more than 50 employees, must offer coverage that is affordable and that provides minimum value to at least 95 percent of employees and their dependents.

In June of 2019, the federal government released a final ruling regarding the offering of HRAs in 2020.  This rule created a new HRA called the Individual Coverage HRA (ICHRA) and clarified proposed rules about calculating the affordability of an ICHRA allowance. 

Are you a business owner or manager considering offering the individual coverage HRA (ICHRA) to your employees? With the regulations and compliance standards required for offering an HRA, it can feel like a daunting task.

As a business owner looking into health reimbursement arrangement (HRA) options, you may have been wondering whether the qualified small employer HRA (QSEHRA) or the individual coverage HRA (ICHRA) is the best choice for your company.

The QSEHRA was created in December 2016 and has been a great option for small businesses looking for an alternative to group insurance ever since. In June 2019, the federal government announced the ICHRA as an additional HRA option for businesses of all sizes, available on January 1st, 2020.

While the company eligibility requirements are different for each HRA, you might find yourself in a situation where your business would qualify for either plan.

In this post we’ll discuss the differences between the options and how they can affect the way you offer the benefit to your employees. You can use this information, along with your business’s individual goals for health benefits, to help decide which plan is the best fit for your company and employees.