Some employers offer their employees certain Health Reimbursement Arrangements (HRA) to help offset the cost of health insurance. These plans, known as ICHRAs or QSEHRAs, generally involve the employer contributing to the cost of health insurance on behalf of their employees, without offering group health insurance.
Individuals who are offered an Individual Coverage HRA must determine whether the ICHRA meets the federal affordability standard. First, fill out this form. This form will provide the needed calculation based on your household size, income, and the ICHRA to determine affordability. You will use the form's result when you are applying for coverage on Virginia's Insurance Marketplace.
If the ICHRA meets the affordability standard, it is a good idea to accept the ICHRA offer. If you choose to accept the ICHRA, you and any eligible household members must either, enroll in:
- Individual health insurance coverage
- Medicare Parts A (Hospital Insurance) and B (Medical Insurance) or Part C (Medicare Advantage) that starts by the time your individual coverage HRA begins.
If the ICHRA is unaffordable, you may choose to decline the ICHRA and apply for advance premium tax credits through the Marketplace.
Please note -
- The only way you and your household will qualify for APTC is if your employer’s HRA does not reach the minimum affordability standards.
- To then qualify for savings, you must “opt-out” of the ICHRA and the ICHRA must not reach the affordability standard
- If you accept your offered ICHRA, you do not qualify for APTC.
There are some key differences between ICHRA and QSERHA:
Qualified Small Employer HRA (QSEHRA)
- The 21st Century Cures Act permits small employers who don't offer group health plan coverage to any of their employees to provide a QSEHRA to their eligible employees to help employees pay for medical care expenses.
- An eligible employee can use a QSEHRA to reimburse medical care expenses for him or herself, as well as any covered dependents (if permitted by the employer).
- To receive reimbursements from a QSEHRA, an employee and any covered dependents must be enrolled in minimum essential coverage (MEC).
- Small employers can provide QSEHRAs for plan years beginning on or after January 1, 2017.
Individual Coverage HRAs (ICHRAs)
- If an employer offers an employee an ICHRA that is affordable, a premium tax credit (PTC) is not allowed for an individual’s Marketplace coverage. This applies to employees as well as spouses and dependents of employees to whom the offer extends.
- If the ICHRA is not affordable based on federal affordability standards, a PTC is allowed if the employee offered the coverage “opts out” of the HRA and the other PTC requirements are met.
- PTC is not allowed for an individual’s Marketplace coverage if the individual chooses to be covered by an ICHRA, regardless of whether the HRA is affordable.
If you are offered an individual coverage HRA, that may impact your eligibility for a premium tax credit on Virginia’s Insurance Marketplace. To determine if you are eligible for a premium tax credit, you can complete the form at this link.
For assistance and information call the Virginia’s Insurance Marketplace consumer assistance center at 888-687-1501.