With a group health plan, you choose the plan and everyone joins it. With an HRA, you choose an amount, and employees put it toward health costs, such as a plan they pick themselves.
Two kinds owners ask about
QSEHRA
- Short for Qualified Small Employer Health Reimbursement Arrangement.
- For certain small employers, generally those with fewer than 50 employees that do not offer a group health plan.
- You contribute to your employees’ health care costs through it.
CHOICE Arrangement (formerly ICHRA)
- HealthCare.gov now calls the Individual Coverage HRA a CHOICE Arrangement.
- Employers of any size can generally offer one.
- To use the funds, employees need their own individual health plan, such as one from the Marketplace.
- You can offer it to every eligible employee, or only to certain classes, such as full-time, part-time or seasonal workers.
How it differs from a group plan
- Who picks the plan. In a group plan, you do. With an HRA, each employee does.
- Where it works. An individual plan is bought where the employee lives, which can help when your staff live in different areas.
- What you commit to. With an HRA, you set the amount you put in.
Questions to bring to your advisor
- Do we qualify for a QSEHRA, or is a CHOICE Arrangement a better fit?
- What happens for employees who already have coverage through a spouse?
- What do employees need to do to use the money?
- Who keeps the records each month?
