What Are HRAs & ICHRAs for Employers?

Health Reimbursement Arrangements (HRAs) and Individual Coverage HRAs (ICHRAs) offer flexible, cost-controlled ways for Minnesota employers to provide healthcare benefits. These plans allow you to reimburse employees for medical expenses or individual insurance premiums, while keeping your budget predictable. At Schatz Benefits, we'll help you explore whether an HRA or ICHRA is right for your business.

What's Included in an HRA or ICHRA Plan

These arrangements allow employers to:

Employees can use the funds toward healthcare expenses or their own individual insurance, depending on the arrangement.

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Reimburse employees for qualified medical expenses

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Provide tax-free reimbursements for health insurance premiums (ICHRAs)

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Set monthly contribution limits for greater cost control

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Offer benefits to specific classes of employees under certain rules (ICHRAs)

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Avoid the complexity of managing a traditional group health plan

Are HRAs or ICHRAs Right for Your Business?

These plans are ideal for:

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Small employers looking for predictable healthcare costs

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Companies with diverse employee needs across locations

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Employers wanting to offer benefits without managing a traditional group plan

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Businesses seeking flexibility in contribution amounts and plan design

We'll help you determine whether an HRA or ICHRA aligns with your goals and walk you through setup.

Common Questions About HRAs & ICHRAs

  • What's the difference between an HRA and an ICHRA?

    Traditional HRAs reimburse medical expenses, while ICHRAs allow employees to buy their own insurance and receive tax-free premium reimbursements.

  • Can I offer an ICHRA instead of a group plan?

    Yes! ICHRAs can be offered in place of a traditional group health plan, and you set the monthly allowance.

  • Are there limits on how much I can reimburse?

    For most HRAs, you set the reimbursement limit. Some HRAs have federal limits, depending on the type.

  • What's required to administer these plans?

    You'll need documentation of reimbursements and may need a third-party administrator-we'll guide you through the process.

  • Can employees use these funds for dental or vision expenses?

    Yes, many HRAs and ICHRAs allow reimbursement for dental, vision, and other qualified medical expenses.