Only about 50% of Americans receive group health insurance through their employer, according to 2019 U.S. Census data. Some employers who don’t provide group health insurance to all (or any) employees will offer an ICHRA or QSEHRA instead. In case you’re not sure what these are, we’re here to explain.
ICHRA stands for Individual Coverage Health Reimbursement Arrangement. An ICHRA is funded only by the employer to help employees pay premiums for individual health insurance coverage. Some also help cover IRS-approved medical expenses.
Qualified Small Employer Health Reimbursement Arrangements, or QSEHRAs, are similar to ICHRAs, except they are only available to employers with fewer than 50 full-time employees. The employer also cannot offer a group health insurance plan to any employees.
The individual health insurance coverage must meet Minimum Essential Coverage (MEC) requirements to qualify for a QSEHRA. Otherwise, a QSEHRA is mostly similar to an ICHRA: