ICHRA vs. QSEHRA – How Do They Compare?
Both the Individual Coverage HRA (ICHRA) and Qualified Small Employer HRA (QSEHRA) will help employees choose a health plan that is right for them, rather than the burden of choosing the one-size-fits-all traditional group health plans. Even though both HRAs will help employers offer their employees’ health benefits, there are differences between the two.
In 2017, small businesses were optimistic when the QSEHRA came into law. There was now an affordable health coverage option for small employee groups, with less than 50 employees and maximum contribution caps, that helped employees pay for their qualified health care coverage. Employees had the ability to secure their own health insurance on or off the Marketplace and the QSEHRA was quickly adopted by thousands of small employers.
In 2020, the HRA lineup expanded with the addition of the ICHRA. The ICHRA was opened to businesses of any size with no maximum contribution caps that provided employers with a way to help employees pay for their individual health insurance premiums. It helped streamline benefit options and cut costs without reducing value to the health benefits offered and brought more options and savings to both employers and employees.
Check out the comparison chart below.
|
Feature |
QSEHRA |
ICHRA |
|
Business size restrictions |
Less than 50 full-time employees |
None |
|
Allowance amount maximum |
$5,450 for self-only and $11,050 for family |
None, no contribution max |
|
Group health plan requirements |
Employer cannot offer group health plan |
Can offer a group health plan, but employer chooses who is offered the group plan and who is offered the ICHRA |
|
Employee eligibility |
All full-time employees are eligible |
Businesses separate employees out based on 11 different classes |
|
Best suited for |
Companies that: - want to offer the same allowance to all full-time employees, except to vary by family status - employees can purchase individual health coverage or be on their spouse’s group health plan - have fewer than 50 full-time employees |
Companies that: - Want to vary allowance by employee classes, such as full-time or part-time, salaried or hourly, or combination - want to offer allowance amounts over QSEHRA caps - want employees to have individual health insurance coverage |
Both the QSEHRA and the ICHRA are designed for employers looking for an affordable and personalized way to provide a health benefits package to their employees. Both HRAs are a valuable benefit, with unique differences, that can help retain and recruit valuable employees.
Contact BASE® for more information at 888.386.9680 or visit www.BASEonline.com to learn more about these HRAs and a variety of other benefit options available to assist in making health care more affordable.
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