Are you a business owner trying to maintain your culture while simultaneously balancing all the changes in premiums, benefit designs, and employee needs? Surely, that can be daunting. Whether you are over or under 50 employees, there could be an alternative option to the traditional medical plan. Your options could fall under the traditional HRA (health reimbursement arrangement), QSEHRA (Qualified Small Employer Health Reimbursement Arrangement), or an ICHRA (Individual Coverage Health Reimbursement Arrangement). Each of these options has slightly differing eligibility criteria.

 Regardless of the option selected, each eligible employee will need to be provided with written notice 90 days before the plan’s effective date and to all new hires upon their date of hire.

QSEHRA:

Q: What are the criteria for offering a QSEHRA?

A:

  1. Employers must employ less than 50 employees.
  2. Employers cannot offer a group health plan to any employee.
  3. Annual notice distribution to employees.
  4. Implementation of plan documents.
  5. All full-time employees must participate.
  6. The employer sets the reimbursement details in the plan document.

Q: What are the criteria for the employees to participate in the QSEHRA?

A:

  1. Employees must have a qualified medical plan, either an individual, spousal, or parental group policy.
  2. Provide proof of all eligible expenses to the employer to receive pre-tax reimbursements.

 Q: What is the maximum benefit the employer can provide for a QSEHRA:

A: 2025 – TBD (slight increase expected). 2024 – $6,150 ($512.50/month) for single employees and $12,450 ($1,037.50/month) for families.

Q: Can I offer in conjunction with an HSA?

A: Yes. The reimbursements are designed for premiums only and the HSA is for medical expenses.

ICHRA:

Q: What are the criteria for offering an ICHRA?

A:

  1. Employers of any size can offer the benefit.
  2. Employers cannot offer the choice between a group health plan or an ICHRA to employees. They can however offer a group health plan to certain classes (criteria apply) and an ICHRA to others.
  3. Annual notice distribution to employees, including plan documents.
  4. The employer sets the reimbursement details in the plan document.

 Q: What are the criteria for the employee to participate in an ICHRA?

A:

  1. Employees must have a qualified medical plan, either from the individual market or enrolled in Medicare.
  2. Provide proof of all eligible expenses to the employer to receive pre-tax reimbursements.

 Q: What is the maximum benefit the employer can provide for an ICHRA:

A: There are no limits to the benefit the employer can offer.

 Q: Can I offer in conjunction with an HSA?

A: Yes. The reimbursements are designed for premiums only and the HSA is for medical expenses.

There are nuances to each option, and we want you to feel educated on your next big decision as an employer. Please let us know how to serve you best at EHD!