Evolution of ICHRA
In 2002, HRAs were defined, and criteria were established under which HRAs could be used. HRAs are only funded by employers and can only be used to reimburse for out-of-pocket medical expenses that are not covered by health insurance plans. Employees pay expenses themselves and submit receipts to their employer. The employer then verifies the receipts and reimburses employees tax-free. HRAs are offered in conjunction with a group health insurance plan.
In 2016, new legislation was implemented called the Small Business Healthcare Relief Act, creating a new HRA (Health Reimbursement Arrangement)the qualified small employer health reimbursement arrangement or QSEHRA. QSEHRA is an HRA for small group employers to reimburse employees qualifying medical expenses, like premiums for individual coverage or other expenses on a tax-free basis. An employer can choose how much they want to contribute to employee's coverage up to the allowed annual limit. For 2023 the limits are $5,850 for employees and $11,800 for employees with dependents. 2024 QSEHRA limits should be announced in November. They are expected to increase slightly from 2023.
In October of 2017, an Executive Order was issued directing the Agencies to expand the usability of HRAs. Finally, in June 2019 regulations were established and released.
By the end of 2019, HSA Insurance put processes in place to give brokers the tools and resources needed to help best manage their ICHRA enrollments.
ICHRA was available as of January 1, 2020.
Today, 2023, ICHRA and QSEHRA are gaining more attention. HSA insurance is here to support you with managing your MA QSEHRA and ICHRA enrollments.