Individual Coverage Health Reimbursement Arrangements

Effective January 1, 2020, employers who do not offer group medical coverage will be able to fund “a new kind of health reimbursement arrangement” (HRA), which will be known as an individual coverage HRA (ICHRA).

The Society for Human Resource Management (SHRM) reports that “using an individual coverage HRA, employers will be able to provide their workers and their workers’ families with tax-preferred funds pay all or a portion of the cost of coverage that workers purchase in the individual market”.

As outlined by SHRM:

“The departments estimate that once employers fully adjust to the new rules, roughly 800,000 employers will offer individual coverage HRAs to pay for insurance for more than 11 million employees and their family members, providing them with more options for selecting health insurance coverage that better meets their needs.”

SHRM further notes that businesses of all sizes are permitted to offer traditional group-health plans or ICHRAs, “but may not offer employees a choice between the two”.

For access to the full article, please click here.


The information included in this blog post originally appeared in an article from SHRM on June 14, 2019 written by Stephen Miller, CEBS.

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