Health Reimbursement Arrangements (HRAs)

Health Reimbursement Arrangements (HRAs)

Health Reimbursement Arrangements (HRAs) are employer-funded health plans that provide employees with tax-free reimbursement for qualified medical expenses up to a fixed dollar amount per year. HRAs are used to pay for medical expenses which can include things like your monthly insurance premium, co-pays, deductibles, and other out-of-pocket costs.

There are several types of HRAs, some of which can be used to purchase health insurance through Your Health Idaho including an Individual Coverage HRA (ICHRA) and a Qualified Small Employer HRA (QSEHRA). That means, you could be eligible to use a tax credit to lower the cost of your monthly premiums when offered certain types of HRAs by your employer.

What is an Individual Coverage HRA (ICHRA)?
An individual coverage health reimbursement arrangement (ICHRA) allows employers to set up a company-funded benefit to reimburse employees for personal health care expenses, including individual market coverage; this is not considered coverage but an alternative to traditional group health coverage options. Individuals must be enrolled in coverage to use the ICHRA funds offered. ICHRAs are available to employers of any size, there are no benefit caps, and employers may vary eligibility and benefit amount by employee class.

  • To qualify for an ICHRA, consumers must purchase individual health coverage.
  • Consumers offered “affordable” ICHRAs, or who accept their ICHRA, are not eligible for Advanced Premium Tax Credits (APTC).
  • For employees who are offered an “unaffordable” ICHRA and are eligible for APTC, the tax credit is generally larger.

What is a Qualified Small Employer HRA (QSEHRA)?
The qualified small employer health reimbursement arrangement (QSEHRA) allows small employers to establish a company-funded benefit to reimburse employees for personal health care expenses, including individual market coverage. QSEHRAs are available to employers with 50 or fewer employees and cap benefit amounts at $5,450 for employee-only coverage and $11,050 for consumers with dependents (2022 amounts).

  • To qualify for a QSEHRA, consumers must enroll in minimum essential coverage.
  • Employees offered QSEHRAs considered “affordable” are not eligible for advanced premium tax credits (APTC).
  • Employees offered “unaffordable” QSEHRAs should reduce their premium tax credit amount (if eligible) by the amount of the QSEHRA to avoid having to pay back money when filing taxes.

HRA Offer Letter
In most cases, your employer must provide a written notice at least 90 days before the start of the HRA plan year. Be sure to keep this letter as it will include the information needed to determine if your HRA is affordable and if you could qualify for extra savings with a tax credit. It will also show the date of your offer, which is considered the date of your Qualifying Life Event.

How to Enroll
If your HRA starts Jan. 1, you can enroll in coverage through Your Health Idaho during the annual open enrollment period which takes place each fall.

If you are newly eligible for a HRA at another time of year, you may qualify for a Special Enrollment Period to enroll in or make changes to existing coverage through Your Health Idaho.

Help is Here
The process can be confusing, but you don’t have to go it alone. Your Health Idaho-certified agents and brokers across the state are ready to help at no cost to you! To find free, expert help in your area, visit