A new way for employees to receive health coverage
A health reimbursement arrangement (HRA) is an account-based group health plan, funded by employers, and used to reimburse health care expenses of employees and dependents. Employers set the terms for what the HRA reimburses, and the employer contributions are an untaxed benefit to employees. A rule that took effect in January 2020 created Individual Coverage HRAs (ICHRA), which permit employers, of any size, to utilize HRAs to pay all, or a portion of, the cost of coverage for an individual market health insurance plan. If a traditional group health plan (the employer selects the coverage for their employees) is working well, there is nothing about the ICHRA rule that makes any changes to those arrangements.