Individual Coverage Health Reimbursement Arrangements (ICHRAs)
Axios Benefits specializes in offering innovative solutions like Individual Coverage Health Reimbursement Arrangements (ICHRA), a flexible, employer-funded benefit. ICHRA allows employees to choose their own health insurance plans and receive tax-free reimbursements for premiums and qualified medical expenses. Employers can customize contributions based on employee classes, offering cost control while enhancing benefits. We partner with all major medical carriers to provide tailored, ACA-compliant plans that prioritize employee choice and affordability.
What is an ICHRA?
An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded benefit that allows employees to receive reimbursements for individual health insurance premiums and other qualified medical expenses. Unlike traditional group health insurance, ICHRA allows employees to choose their own insurance plans based on personal needs and preferences.
Who is eligible for an ICHRA?
ICHRA is available to employees of businesses of any size. Employers can choose to offer ICHRA to all employees or to specific employee classes based on factors such as full-time vs. part-time status, location, or job position. To qualify for reimbursement, employees must be enrolled in a qualified individual health insurance plan.
How does an ICHRA work?
With an ICHRA, employers provide a set amount of money (reimbursement allowance) for employees to purchase individual health insurance plans on the marketplace or elsewhere. Employees can use the funds to pay premiums, out-of-pocket expenses, or other qualified medical expenses, up to the allowed reimbursement amount. The employer reimburses the employee for these expenses on a tax-free basis.
What types of health plans are eligible for ICHRA reimbursements?
Employees must have a qualified individual health insurance plan, which may include plans purchased through the Health Insurance Marketplace, directly from insurance carriers, or other individual health plans that meet the Affordable Care Act (ACA) requirements.
Can I use ICHRA with other types of health coverage?
ICHRA cannot be used to reimburse premiums for group health insurance or Medicare. However, employees can use their ICHRA benefits alongside other individual health plans, as long as the individual plan qualifies under ACA standards.
Are ICHRA reimbursements taxable?
No, ICHRA reimbursements are generally not taxable for employees. Since the reimbursements are made under IRS guidelines, they are considered tax-free as long as they are used for qualified medical expenses.
Can I use my ICHRA for dependents' health coverage?
Yes, employees can use their ICHRA for qualifying health insurance premiums for themselves and their dependents, as long as those dependents are covered by an individual health insurance plan that meets ACA standards.
