Understanding Individual Coverage Health Reimbursement Arrangements (ICHRAs)
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You may have heard of health reimbursement arrangements (HRAs) before. These are employer-sponsored savings accounts that reimburse you for certain medical expenses.
An individual coverage HRA (ICHRA) is similar—it uses funds from your employer to help pay for certain medical expenses. However, there are some important features of ICHRAs that you should understand.
This article explains more about ICHRAs and how they may be used.
Comparing HRAs to ICHRAs
As previously stated, HRAs reimburse you for certain medical costs. Such expenses might include those associated with doctor visits, medical procedures and prescriptions, depending on the plan. To qualify for an HRA, you must be enrolled in your employer’s group health plan.
ICHRAs are a bit different. These accounts can reimburse you for certain medical expenses, your insurance premium or both. Whether your ICHRA will cover both your premium and medical expenses (or just one) will vary by employer.
ICHRA Eligibility
To qualify for an ICHRA, you must enroll in individual health coverage using a Health Insurance Marketplace (Marketplace), a private insurer, Medicare or another method. In other words, you cannot be enrolled in an employer’s group health plan and qualify for an ICHRA.
Additionally, any dependents (e.g., a spouse or children) you have on your individual health plan would also be able to use ICHRA funds.
How ICHRAs Work
On a very basic level, here’s how an ICHRA works:
- You obtain individual health coverage through a Marketplace or another method rather than purchasing health coverage through your employer.
- Your employer contributes a set amount every month into your ICHRA so you can be reimbursed for certain expenses as they are incurred. Contributions and reimbursements are both tax-free. Your employer decides which expenses are eligible for reimbursement under the plan’s terms.
- Unused funds at the end of the plan year may go back to the employer or carry over, depending on the plan.
It’s as simple as that!
More Information
Speak with HR to learn more about the ICHRA options available to you.
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New Year, New Me! No Follow Through? Back to Old You…
By Taylor Brouillet-Stock, Account Specialist
Did you make any New Year’s Resolutions for 2022? Now that it’s February, I think it’s time to take a step back and evaluate how those resolutions are coming along. New Year’s Resolutions can be hard to keep, especially if you plan to make drastic changes in your life and do a complete 180 from December 31st to January 1st.
I have noticed (and I am guilty of this as well) that people tend to put a lot of pressure on themselves to fulfill certain resolutions by a certain time in the year. In my experience, and from what I have witnessed from others, when those resolutions aren’t met by that arbitrary due date it can make you feel like a failure or that your entire year is ruined. I think that having goals for your life and wanting to build better habits is a great thing! But I also think that we shouldn’t put too much pressure on ourselves or put ourselves down if things don’t go exactly the way we expect them to.
In this article, James Clear lists 30 one-sentence stories from people who have built better habits in their lives. I think this is a great example of how making just a slight change in your behavior can result in big changes down the road that help you build a better, healthier lifestyle. If you are anything like me and struggle to keep New Year’s Resolutions, give this article a read as it may inspire you to make those small and manageable changes to bring you a happier way of life!
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The RISQ RECAP – January 31st – February 4th, 2022
January 31 – February 4, 2022
Each week, you’ll find specially curated news articles to keep you up to date on the ever-evolving world of insurance and risk management. The articles are divided out between items relevant to Property & Casualty, Employee Benefits/Human Resources, and Compliance. We’ve included brief summaries of each item as well as a link to the original articles.
PROPERTY & CASUALTY
How to protect your house from costly winter weather damage
“Whether snow, ice, freezing or flooding, winter weather can cause a host of headaches for homeowners. And if you’re in a new house that you’re still getting to know, it’s especially worth taking steps to be sure you’re prepared. ‘There are so many people that will be entering the winter as homeowners for the first time,’ said Steve Wilson, senior underwriting manager at insurer Hippo. ‘They might not have thought about how to protect this big investment.’” Full Article
– CNBC
EMPLOYEE BENEFITS, HUMAN RESOURCES, & COMPLIANCE
Upcoming Deadlines for ACA Reporting and Similar State Reporting “With respect to health coverage in 2021, the ACA deadlines range from February 28 to March 31, 2022, and the state deadlines range from January 31 to April 31, 2022. All of the reporting discussed in this alert relates to health coverage in 2021.” Full Article – Venable LLP
Washington State Long-Term Care Premium Tax Formally on Ice “Lawmakers have passed legislation delaying the implementation of Washington state’s novel long term care premium tax until July 2023. Employers who have already withheld the tax will need to refund it to their employees within 120 days. Those about to run their payroll should take steps to avoid (further) withholding of the tax.” Full Article – Lane Powell
How Are Private Insurers Covering At- Home Rapid COVID Tests? “At this time, about half of the insurers reviewed are implementing their testing coverage policy using only reimbursement. The remaining half of the top insurers had a direct coverage option set up. Enrollees in plans with a direct coverage option may have reimbursement limited to $12 per test if a test is purchased outside of this option.” Full Article – Henry J. Kaiser Family Foundation
In 2022 MHPAEA Report, DOL Highlights Robust Enforcement of CAA-21 and Widespread Noncompliance “The report does include guideposts for complying with MHPAEA including: [1] Insight into how the Departments chose who to request comparative analyses (CAs) from. [2] A list of the most common NQTLs for which DOL requested CAs. [3] The most common deficiencies in submitted CAs. [4] Common corrections and plan amendments in response to the Departments’ enforcement. The DOL has also focused its efforts on service providers that administer claims for large numbers of plans so that any resulting changes are passed through to those plans.” Full Article – Thomson Reuters Practical Law
Incoming PhRMA Chair Expects Drugmakers to Face ‘Some Pain’ in 2022 Amid Reform and Efforts to Rebuild Patient Trust “The debate over drug costs may have hit a tipping point. A recent federal report found that more than 5 million Medicare beneficiaries struggle to afford their prescriptions, while Morning Consult polling consistently pegs health care costs as a top issue for voters. And PhRMA spent record sums last year to oppose some proposals, arguing that lawmakers are taking the wrong approach to curb patients’ costs by targeting drug prices rather than the ‘broken insurance system.” Full Article – Morning Consult
Health Plan Fiduciaries Must Solicit Information from Brokers and Consultants “Plan fiduciaries should consider taking the following actions: [1] Identifying and assigning internal responsibility for soliciting and evaluating required information from brokers and consultants. – Ballard Spahr LLP
[2] Introducing contractual obligations on brokers and consultants to provide the required information. [3] Developing the means to evaluate the information received. [4] Assessing whether the compensation is, in fact, reasonable.” Full Article
STATE & INTERNATIONAL COMPLIANCE
In addition to the RISQ Review, RISQ Consulting also provides a resource that features changes and updates to State and International Compliance measures. We’ve included brief summaries of each item below, and also provided links to the original articles if you’d like to read further.
New York
Federal and New York City Workplace Vaccination and Testing Mandates: A Primer
“At President Biden’s urging, in late 2021, different arms of the federal government issued three high-visibility vaccine mandates to private employers, applying to federal contractors, many health care workers, and midsized and large employers. Those were followed by a sweeping order in New York City requiring businesses there to verify that their on- site employees have been vaccinated.” Full Article
– Skadden Arps
New Jersey
New Jersey Governor Signs Bill Expanding Parking Lot Liability for Employers
“On a cold January morning, New Jersey Gov. Phil Murphy trudged through the snow-covered statehouse parking lot and, with one swipe of pen, shifted the landscape for injuries that occur in employer parking lots. On January 10, 2022, Gov. Murphy signed S771 into law, expanding workers’ compensation liability in parking lots.” Full Article
– Goldberg Segalla
Illinois
Beware of the Illinois Employee who Insists on Independent Contractor Status
“Imagine that your company contracts with a salesperson, consultant, or other professional, who insists on an independent contractor arrangement. Your company accommodates by paying a daily rate for services, setting up a payment-upon-invoicing system, paying as a 1099 tractor, and signing a written contract stating your agreement that he is an independent contractor.” Full Article
– Krieg Devault
New Hampshire
Supreme Court of New Hampshire Weighs in On Reasonable Accommodations for Medical Marijuana Users
“The Supreme Court of New Hampshire reversed a trial court decision that dismissed a former employee’s complaint alleging his employer failed to consider whether it could reasonably accommodate his use of marijuana for medicinal purposes.” Full Article
– Seyfarth Shaw
Louisiana
Louisiana Supreme Court Upholds Private Employer Vaccine Mandate
“In Hayes v. University Health Shreveport, LLC, 2022 WL 71607 (La. Jan. 7, 2022), the Louisiana Supreme Court ruled that a hospital – or any other private employer – may impose an absolute vaccination requirement and fire any employee who fails to comply.” Full Article
– Reed Smith
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