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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