The Individual Coverage Health Reimbursement Arrangement or ICHRA (pronounced ‘ik-rah’) allows employers to pay for their employees to buy health insurance coverage on the open market with pre-tax money.
Unlike a Traditional HRA that only reimburses for deductible, co-insurance and other out-of-pocket expenses, the Individual Coverage HRA can be used to pay the insurance premium.
Allowing employees to choose the health insurance plan that fits their needs can be better for many employers and employees. Employees are very diverse and the typical 2 or 3 plan options are not enough to meet their diverse needs. Giving employees dozens of options and allowing them to vote-with-their-feet will put the power in the employees’ hands to choose what’s right for them.
