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QSEHRAs vs. ICHRAs

How do Qualified Small Employer HRAs (QSEHRA) COmpare to individual Coverage HRAs (ICHRA)

  QSEHRA ICHRA
Size Employers with 50 or less employees Any size employer
Group Health Plans (GHP) Cannot also offer GHP Can offer GHP to separate class
Class All non-excludable Offered on same terms within class
Eligibility Individual coverage, GHP through spouse, alternative healthcare are allowed Must be enrolled in individual coverage or Medicare, no GHP
Maximum $5,150/$10,450 per year (different each year) None
Expenses

eligible medical expenses*, individual health premiums, including spouse coverage through their employer

eligible medical expenses*, individual health premiums, Medicare (+supplements), catastrophic health
Approval Medical substantiation required; initial proof of MEC required annually before first expense approved and self-attestation at claim filing Medical substantiation required, self-attestation of MEC annually and at claim filing

Premium Tax Credit (PTC)

Any PTC recieved is reduced by the amount of the QSEHRA allowance

Employees are ineligible for the PTC when enrolled in a ICHRA

Carryover

Allowed; reimbursements can't exceed max Allowed

Health Savings Account (HSA)

Not HSA Compatible Can be designed to be HSA Compatible
Medicare Secondary Payer (MSP) Not subject to CMS Reporting Subject to standard CMS Reporting rules
COBRA Not COBRA-eligible COBRA-eligible if covered by individual health coverage

*§213(d)

QSEHRA

QSEHRAs are open to employers with fewer than 50 full-time employees that do not offer group health insurance. When employees sign up for a Qualified Small Employer HRA, the employer is the one making contributions to the QSEHRA. That means no money will be deducted from the employee’s paychecks.

ICHRA

ICHRAs can be integrated with, and reimburse premiums for, individual health insurance coverage chosen by employee if certain conditions are met. ICHRAs can be offered by an employer of any size and has no cap on the amount of contribution like a QSEHRA does.  

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