Individual Coverage HRA (ICHRA)
Tax-free reimbursements for health insurance premiums and medical expenses
Overview & Eligibility
An Individual Coverage HRA (ICHRA) allows employers to reimburse their employees tax-free for insurance rather than buying it for them. Employees purchase their own plan through the individual market and get reimbursed for their premiums tax-free from the ICHRA.
ICHRAs have no contribution limits.
How it Works
Employers can offer both a group health plan and ICHRA, but not to the same employee groups. Employees who are not enrolled in the group health plan can participate inthe ICHRA.
- 1Employer establishes a reimbursement limit and qualified medical expenses.
- 2Employees choose the health insurance plans they want.
- 3Employees pay their premiums using an Ameriflex Debit Mastercard®, or
- 4They pay their premiums out of pocket and submit a claim form for reimbursement.
- 5Employees get reimbursed for eligible claims paid out of pocket.
The Value for Employees
ICHRA funds can be spent on insurance premiums, eligible healthcare expenses, or both, depending on how the employer sets it up. This allows employees to choose a health plan that best fits their needs.
Employers fund the ICHRA to offset rising healthcare costs and offer employees a convenient way to pay for health insurance.
Employees will receive an Ameriflex Debit Mastercard® linked to their ICHRA. Employees can use their card for eligible purchases everywhere Mastercard® is accepted. Account information can be securely accessed 24/7 online and through the mobile app.
The Value for Employers
Employers can designate employee classes and reimburse different amounts to those classes in a fair manner. ICHRAs also provide more predictability around monthly costs vs. a group health plan.
Employers can set up the ICHRA to reimburse health insurance premiums, healthcare expenses, or both. There is no maximum reimbursement limit. An ICHRA can also be combined with a health savings account (HSA).
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