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Individual coverage health reimbursement arrangements (ICHRAs)

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This innovative solution provides an expansion of HRA health benefits for employees. It represents a more modern model of health insurance.

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New to an ICHRA? Learn the basics.

The idea behind ICHRAs is based on reimbursing employees for insurance rather than buying it for them. It allows employers to structure reimbursements based on employee class, family size or employee age, or to provide everyone the same amount. An ICHRA can cover insurance premiums and out-of-pocket health care expenses if the employer chooses to offer that via their ICHRA plan. 

  • Features include health care expenses if the employer chooses to offer that via their ICHRA plan. 
  • Employers design their plan, including defining who is eligible and establishing reimbursement limits.
  • Employees purchase their own qualified individual medical plan.
  • Employees submit claims for reimbursement.
  • Employers reimburse employees for valid claims.
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Claims and reimbursements

Employees can pay for eligible health care expenses with a personal credit card, check or cash. Then they submit a claim by email, mail or fax. Along with the claim, they send a receipt that shows: 

  • The name of the doctor or other service provider, pharmacy or store
  • The date of service or purchase
  • A description of the service(s) or item(s) purchased
  • The amount charged (or what the employee is responsible for paying)

ICHRA claim form

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Frequently asked questions

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  • An individual coverage health reimbursement arrangement (ICHRA) is an expansion of health reimbursement account/arrangement (HRA) services. It is offered through your employer. You will need to check with your benefits department or human resource representative to determine if you are eligible for this plan.

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  • Yes, it is a type of HRA. It provides you with pre-tax contributions to use toward IRS-eligible expenses including medical, prescription, dental, vision and qualified over-the-counter expenses not paid by your group benefit plan.

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  • An ICHRA is a benefit offered by an employer. You will need to check with your benefits department or human resource representative to determine if you are eligible for this plan. 

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  • Examples include doctor’s visits and copays, prescriptions, dental treatment, eyeglasses and lenses, and more. Use our qualified medical expense tool to see qualified medical, dental and vision expenses. The expenses for ICHRA are the same as the expenses for an FSA.

    You can search for eligible expenses in IRS Publication 502.

    Note: Employers can choose what they want their ICHRA to reimburse including:

    • Insurance premiums only
    • Insurance premiums + qualified medical expenses
    • Qualified medical expenses only

    Make sure you check your plan information as to what exactly is available for reimbursement under your ICHRA benefit. 

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Health savings accounts (HSAs) are offered or administered by Optum Bank®, Member FDIC, or ConnectYourCare, LLC, each a subsidiary of Optum Financial. HSAs are subject to eligibility requirements and restrictions on deposits and withdrawals to avoid IRS penalties. State taxes may apply. Fees may reduce earnings on account. Flexible spending accounts/arrangements (FSAs), health reimbursement arrangements (HRAs), Commuter and Parking Benefits, Adoption Reimbursement Plans, Tuitions Reimbursement Plans, Surrogacy Reimbursement Plans, Lifestyle Plans, COBRA Benefits, and all other account types are administered on behalf of your plan sponsor by Optum Financial, Inc. or ConnectYourCare, LLC (collectively, “Optum Financial”) and are subject to eligibility and restrictions. Please contact a legal or tax professional for advice on eligibility, tax treatment, and restrictions. Please contact your plan administrator with questions about enrollment or plan restrictions. Federal and state laws and regulations and the design of your plan are subject to change.

Self-directed mutual fund investment options are made available through the services of an independent investment advisor, or your plan sponsor. Discretionary advisory services are provided by Betterment LLC, an SEC-registered investment adviser, with associated brokerage transactions provided by Betterment Securities, member FINRA/SIPC. For details and disclosures visit betterment.com. Certain brokerage services are offered through TD Ameritrade, Inc., member FDIC/SIPC and a subsidiary of The Charles Schwab Corporation.  For details and disclosures, visit  www.tdameritrade.com. The Schwab Health Savings Brokerage Account is offered through Charles Schwab & Co., Inc., member FINRA/SIPC. For details and disclosures, visit schwab.com.

Orders are accepted to effect transactions in securities only as an accommodation to HSA owners. Optum Financial and its subsidiaries are not broker-dealers or registered investment advisors and do not provide investment advice or research concerning securities, make recommendations concerning securities, or otherwise solicit securities transactions.

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