Unlike other types of Health Reimbursement Arrangements (HRA)s, the Individual Coverage HRA (ICHRA) only allows certain types of health insurance plans to qualify for tax advantage reimbursement. If you’re considering implementing an ICHRA Plan, it’s crucial to understand which plans are ICHRA-eligible and which are ineligible.
Eligible ICHRA Plans
- Individual Major Medical Health Insurance: These are ACA-compliant plans purchased on or off the exchange. Often referred to as metal tiers due to their names like bronze, silver, gold, or platinum these plans provide comprehensive coverage.*
- Medicare Part A and B or Part C: Individuals enrolled in Medicare Part A and B, or Part C plans are eligible for ICHRA. Additionally, all Medicare supplements are reimbursable if the individual has either Part A, Part B, or Part C. Also, important to note in an ICHRA Plan, Medicare alone is not an eligible class.
- Student Health Insurance: Students with health insurance coverage specifically designed for students.
- Catastrophic Plans: Limited to those under the age of 30 or individuals who qualify for a hardship exemption.
* Please keep in mind that if you are receiving a premium reimbursement through ICHRA, you are not eligible to receive a premium tax credit.
Ineligible ICHRA Plans
It’s crucial to be aware of the plans that don’t qualify for individual coverage in an ICHRA plan. These plans include your spouse’s employer group plan, Medicaid, TRICARE, COBRA, short-term plans, indemnity plans, Health Sharing Ministries plans, Association Health Plans, Multiple Employer Welfare Arrangements (MEWA), and preventative-only Minimum Essential Coverage (MEC) plans.
Why are these plans Ineligible for ICHRA?
These specific qualifications can be found in the Public Health Services (PHS) Act Sections 2711 and 2713. For a plan to be considered qualified individual coverage, it must meet these minimum requirements.
The plan should offer essential health benefits without any annual or lifetime dollar limits.
It also must fully cover preventative health services without cost-sharing to the insured. In essence, the plan should meet the standards of Minimum Essential Coverage through an individual marketplace plan.
For more information on ICHRA and ICHRA compliant Individual Health Insurance plans, you can reach out to our team at 952-666-7474 or email us at Sales@flytehcm.com. We’re here to help you make informed decisions with ICHRA.