Individual Coverage Health Reimbursement Arrangements (ICHRAs)

What is an ICHRA?

ICHRAs allow employers of any size to designate funds that employees can access tax-free to reimburse the cost of individual health insurance coverage. The ICHRA may also cover Medicare premiums, out-of-pocket medical, dental, and vision expenses should the employer deem these expenses eligible under than plan.

Why outsource ICHRA administration to DBS?

DBS has a proven record of providing exceptional service to clients of all sizes located across the United States. Our unique plan design and employee communication process, knowledgeable customer-focused staff combined with our trademarked robust proprietary software allows for the most effective understanding and administration of your plan.

DBS works closely with employers to create an effective and compliant plan design that meets their needs and objectives. DBS also educates employees to increase their understanding of the ICHRA and to help them become knowledgeable healthcare consumers.

What are the benefits of an ICHRA?

Budget Friendly

Many employers make health plan changes based on cost savings for the company and its employees. With an ICHRA, the employer decides how much is reimbursed based on a budget that works best for the company, essentially eliminating the headaches caused by group health plan renewals.

Flexibility

ICHRA’s are flexible for both the employees and the employer. For employees, they are free to choose the health coverage that best fits their needs while not having to worry about the network and coverages of a group health plan. For employers, businesses can establish different contribution amounts for different classes of employees such as;

1. Full-time employees
2. Part-time employees
3. Employees who are paid on a salaried basis
4. Non-salaried employees (e.g., hourly employees)
5. Employees whose primary site of employment is in the same rating area (as defined under health care reform’s rules for establishing individual market premiums)
6. Seasonal employees (as defined under Code §4980H or the Code §105 regulations, as elected by the ICHRA sponsor)
7. Employees included in a unit covered by a particular collective bargaining agreement (or an appropriate related participation agreement) in which the ICHRA sponsor participates, as described under Code §105
8. Employees who have not satisfied a waiting period for coverage, if the waiting period complies with health care reform’s waiting period requirements
9. Nonresident aliens with no U.S. based income
10. Employees hired for temporary placement at an unrelated entity
11. Employees who are in a combination of two or more of the classes (e.g., full-time employees covered by a particular collective bargaining agreement)

Attract and Retain Talent

Small business’ often can’t compete with the deep pockets of larger employers that offer a group health plan. ICHRAs give employers the ability to fund a dollar amount that works best in their budget while also providing reimbursement to employees for their qualifying coverages. Some employees prefer the flexibility of choosing their own coverage.

ACA Compliant

ICHRA plans are considered ACA compliant as they are considered minimum essential coverage and employer contributions are deemed affordable when designed properly.

Tax Advantages

Since the ICHRA falls under Section-105 of the IRS code, the reimbursements given to employees are tax free and do not need to be reported as income on employees’ taxes.

How do I get started?

1. Request a quote using the link below or contact DBS at (800-234-1229) to speak with an Account Executive.
2. A DBS Account Executive will work with you to help determine the compliant ICHRA plan design that best meets your needs.
3. The DBS Client Services Department will work with you through the onboarding process and will provide your Agreement for Service and Plan Document.
4. DBS will provide communication and enrollment information for distribution to your employees.
5. DBS will assign a designated Claims Specialist to administer your plan.
6. DBS Customer Service Representatives will be available to work with your employees and address their claims questions.