BASE^® Blog

The Affordable Care Act (ACA) changed the game when it changed the way that health insurance is purchased and provided to employees.  For decades, small businesses struggled to provide health benefits to employees due to continuously changing regulations and high costs.  This is where the Individual Coverage HRA (ICHRA) steps in.

The Individual Coverage Health Reimbursement Arrangement (ICHRA) allows for businesses to provide money, on a tax-free basis, to employees to use towards their eligible health care expenses. 

The BASE^® ICHRA provides a health benefit that better fits the needs of both employers and employees.  It helps to streamline benefit options and cut the cost without reducing value when it comes to the health benefits an employer provides their employees. 

Would your business benefit from…

Cost Savings.

One of the biggest benefits of the ICHRA is that it can save businesses money on health insurance costs.  By not providing a traditional group health plan, the employees can choose their own individual health plan and be reimbursed a certain amount each month, saving both the employer and employee on health insurance premiums.

Increased Employee Satisfaction.

The ICHRA can provide employees with more control over their health care choices.  They get to pick a plan that fits their needs resulting in an increase in employee satisfaction.  Satisfied employees are more than likely to stay with a company that offers benefits that fit their needs.

Recruitment Opportunities.

Small businesses struggle when it comes to competing with larger companies who can provide a comprehensive health benefits package to their employees.  But by offering the ICHRA, small businesses can level the playing field by providing a more attractive benefits package. 

Budget Friendly.

The ICHRA allows small businesses to set a budget that fits their bottom line and makes it easier to predict their monthly costs.  While allowing them to contribute to their employees’ health insurance. 

Design Flexibility.

Long gone are the days of one-size-fits-all.  The ICHRA can be designed to meet the specific needs of the business such as set different contribution limits for different categories of employees. 

…then the ICHRA might be the perfect fit for your business. 

The ICHRA is a great option for small businesses wanting to provide health benefits to their employees.  To learn more, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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One of the newest Health Reimbursement Arrangements to hit the block is the Excepted Benefit HRA (EBHRA).  Starting in 2020, this HRA has helped push past the “one-size-fits-all” health benefits package to give employees more options in designing how their health care benefits work for them. 

The Excepted Benefit HRA (EBHRA) is a tax-advantaged Health Reimbursement Arrangement that allows employers to reimburse their employees for their excepted benefits that is offered alongside a group health plan. 

The BASE® EBHRA is a limited dollar HRA that allows employees to pay for their copays, deductibles, prescriptions, dental and vision insurance premiums, COBRA continuation coverage, and short-term limited duration insurance premiums. 

Here are some things to know about the EBHRA: 

Maximum Contribution Rates: 

• For 2024, the maximum contribution rate is $2,100. 

Requirements: 

• The employer must offer the group health plan but the employee does not have to participate in it to participate in the EBHRA.
• The EBRHA must be offered on the same terms and conditions to all eligible employees.
• The employer cannot offer above the IRS maximum contribution limit.
• The EBHRA cannot reimburse premiums for individual health coverage.

 How it Works: 

• Employer will choose to offer the EBHRA and set an amount that falls within the employer’s budget and the legal limits and also designate which expenses are deemed qualified for reimbursement.
• The employee will enroll in the EBHRA.
• The employee will incur an EBHRA-eligible expense and submit a claim for reimbursement.
• The employer will reimburse all valid claims.

 Other Health Benefits Compatibility:  The EBHRA cannot be offered in conjunction with the Individual Coverage HRA (ICHRA) but can be offered to those employees who participate in the employer-sponsored group health plan and/or Health Savings Account (HSA).  

The BASE® EBHRA might be the newer “kid” on the HRA block, but it is another innovative and cost-effective way to provide health benefits to employees that provides more than just savings to both employer and employee.  Contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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