New ICHRA Proves to Be Beneficial

Prior to 2020, some small businesses had found it difficult to provide benefits to their employees under a traditional group health plan, but as of January 1, 2020, a new regulation expanded how Health Reimbursement Arrangements could be used and how employers pay for employee health care coverage.  The rule was set to benefit small employers, making it easier for them to compete with larger businesses by creating another option to provide their employees with a competitive benefit package.  The Individual Coverage Health Reimbursement Arrangement (ICHRA) was projected to benefit over 800,000 small businesses and help 11.4 million employees and their family members purchase individual insurance coverage using HRA funds.

The BASE® Individual Coverage HRA (ICHRA) is a tax-advantaged health benefit used to reimburse employees for personal health care expenses, such as individual health insurance premiums and out-of-pocket medical expenses.  The ICHRA provides a health benefit to better fit the needs of many businesses, of all sizes.  It allows for the opportunity to increase flexibility and employee choice by designing a reimbursement that works for the business for their employees’ individually purchased insurance.

Almost halfway through 2020, what has BASE® been seeing with the ICHRA?

BASE® is on their way to helping many small businesses across the country save thousands of dollars each year with the Individual Coverage HRA, and most are choosing to reimburse both insurance premiums and out-of-pocket expenses.  New with this HRA and one of the biggest selling points is the ability to establish different reimbursement rules for different types of employees (i.e. classes).  These classes allow for a flexible benefit solution, and many businesses are commonly separating their salary and hourly employees to determine the benefit they receive.

According to Casandra Mueller, BASE® Sales Representative, she knows that for employers keeping and retaining employees is hard.  “Finding a way to offer benefits that are tax-free to the employee and a tax-deductible expense to the employer is what makes the ICHRA beneficial.  The ICHRA is a great avenue for employers to take that first step into offering benefits to employees, even if it is a small dollar amount.”

With the ICHRA, both the employer and employees realize benefits.  The employer can provide their employees with a better choice in health care, with the employee choosing their own health insurance plan meant to fit the employees’ lives, as well as economic and family status.  The ICHRA offers better cost control.  The employer does not need to worry about increases in insurance premiums since the employer establishes an affordable monthly allowance for employees to put towards individual health insurance premiums and out-of-pocket medical expenses.  This creates an expected monthly amount for both the employer and employee with no surprises!  

Talk to BASE® about getting started with the ICHRA today.  Call 888.386.9680 or visit

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