What type of reimbursement arrangement is available to small employers besides SHOP plans?

Individual Coverage Health Reimbursement Arrangements (ICHRAs) are specifically designed for small employers to provide a flexible and tax-advantaged way to reimburse employees for their individual health insurance premiums and out-of-pocket medical expenses. This arrangement allows employers to set aside a specific amount per employee for health care costs, which can be particularly beneficial for small businesses looking to offer health benefits without the complexity and high costs associated with traditional group health insurance plans.

ICHRAs also empower employees by providing them with the ability to choose the individual health insurance coverage that best suits their needs, rather than being restricted to a group plan. This flexibility can help attract and retain talent in competitive job markets, especially in smaller organizations.

While Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and Health Care Flexible Spending Accounts are valuable benefits, they generally serve different purposes or are used in conjunction with group health plans. HSAs are accounts for individuals with high-deductible health plans, and FSAs typically do not offer the same level of flexibility and are more limited in the types of expenses they cover compared to ICHRAs. Therefore, the option of ICHRA uniquely addresses the needs of small employers offering health benefits.