There is a new type of HRA called an ICHRA that brings a little more flexibility when it comes to how to structure & vary how much you offer your employees. However, the ICHRA is less flexible when it comes to what type of plans your employees need to have in order to participate.
In short, if your QSEHRA is working for you, it's probably still the best option for you.
However, if you answer yes to any of the points below, an ICHRA might be worth looking into for next year.
Do you want to reimburse more than the QSEHRA reimbursement limit?
Do you want to reimburse different amounts for different types of employees (i.e., offer different allowances to part-time vs full-time employees, or to hourly vs. salary employees)?
Has your company grown beyond 50 employees? (That’s great, by the way! It just means you’ll need to “graduate” up to an ICHRA.)
I said yes to at least one of those. So, what now?
Before you make the switch, there is another big difference to consider. The biggest drawback for existing QSEHRA clients to make the switch is that ICHRA is that some of your participating employees may not be able to participate in ICHRA based on their existing health insurance coverage.
For QSEHRA, employees have to have a MEC plan. That means employees can have an on-exchange major medical plan, Medicare, Medicaid, COBRA, TRICARE, spouse's group plans, or even short-term + MEC or indemnity + MEC plans.
For ICHRA, employees actually have to have a major medical individual health insurance plan from the marketplace (either on- or off- exchange) or Medicare. Those on their spouse's group plans, TRICARE, COBRA, Medicaid, or any other alternative option cannot participate in ICHRA.
How can I dig in further?
We have tons of information for you to research! A good start is this one page PDF that gives a side-by-side comparison between QSEHRA and ICHRA.
And of course, chat with your Client Success team anytime! We can take a look at your existing QSEHRA and help you consider whether making the switch is the right move for you.