Individual Coverage Health Reimbursement Arrangement (ICHRA) is a health benefit solution that allows employers of all sizes to offer employees a monthly allowance of tax-free funds. Employees can use these funds to purchase individual health insurance plans, providing a flexible and personalized approach to healthcare.
Benefits of ICHRA
For Employers:
- Cost Control: Employers can set predictable budgets for health benefits, avoiding the rising costs of traditional group health insurance.
- Flexibility: ICHRA allows for different reimbursement levels based on employee classes, such as full-time, part-time, or seasonal workers.
- ACA Compliance: ICHRA meets the Affordable Care Act (ACA) requirements for Minimum Value and Affordability, helping employers avoid penalties.
- Attraction and Retention: Offering a flexible health benefit can help attract and retain top talent by meeting diverse employee needs.
For Employees:
Choice: Employees have the freedom to choose health insurance plans that best suit their individual or family needs.
Tax Advantages: Reimbursements for health insurance premiums and qualified medical expenses are tax-free.
Portability: Employees can keep their health insurance plans even if they change jobs, providing continuity of care.
How ICHRA Works
- Employer Setup: Employers decide the amount of tax-free money to allocate to employees each month.
- Employee Enrollment: Employees purchase individual health insurance plans through the ACA marketplace or directly from insurers.
- Reimbursement: Employees submit proof of insurance and qualified medical expenses to receive reimbursements from their ICHRA funds.
Why choose ICHRA through PAI?
Along with using the Group Solutions Technology, PAI bring its 40+ years of experience providing flexible administration services, and a diversified portfolio with white-glove customer service to the ICHRA market with its partners.