Individual Coverage Health Reimbursement Account

An individual coverage health reimbursement arrangement (ICHRA) is a new type of health reimbursement arrangement, available as of 2020, in which employers of any size can reimburse employees for some or all of the premiums that the employees pay for health insurance that they purchase on their own thru the individual State Marketplaces. ICHRAs were created under regulations issued by the Trump administration in 2019. An employer cannot offer an employee a choice between a company sponsored group health plan and an ICHRA; it has to be one or the other. An employer can offer both a group health plan and an ICHRA, but they have to be offered to different classes of employees so that no employee has an option to choose between the group plan and the ICHRA. Employees must be enrolled in an individual market health plan in order to receive the ICHRA benefit.