Understanding Individual Coverage Health Reimbursement Arrangement (ICHRA)
What is an ICHRA?
An Individual Coverage Health Reimbursement Arrangement (ICHRA) is a modern way for employers to provide health benefits. Employers reimburse employees a set amount for health insurance premiums and medical expenses, while employees choose the plan that fits them best. This arrangement provides the same tax advantages as traditional group health plans.
Who can Offer & Participate?
Eligibility to Offer: Employers of all sizes can implement an ICHRA.
Participation: Full-time, part-time, and even independent contractors are eligible.
Key Advantages of ICHRA
- Cost Savings: Employers and employees often see immediate and significant savings when transitioning to an ICHRA.
- Employees can select a plan that suits their needs and preferences, offering flexibility.
- Employers avoid the challenges of balancing benefits with rising costs, resulting in superior budget control.
- Employees also appreciate the ability to tailor their coverage, leading to higher satisfaction and happier teams.
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