About ICHRA
Thatch is the easiest way to give your team healthcare. Learn more about how Thatch powers healthcare through the Individual Coverage HRA — a 2020 statute transforming healthcare and employee benefits.
Basics
What is an Individual Coverage Health Reimbursement Arrangement?
An Individual Coverage Health Reimbursement Arrangement (ICHRA) is a way for your company to provide healthcare benefits to your team. It's a new type of health benefit that allows you to use pre-tax money from your business to reimburse your team for any of their healthcare expenses, including health insurance, dental insurance, vision insurance, and more.
ICHRAs are attractive because they're a way to provide more flexible and cost-effective healthcare benefits to your team. Thatch is a service that administers and manages ICHRAs for your team.
FEATURES OF ICHRA
A budget instead of benefit
Healthcare in the US has traditionally been provided via employers using a group health plan, where the employer chooses a specific insurance plan (e.g. the United Healthcare HMO 80) for all employees. Occasionally, businesses provide a few options.
Instead of choosing a one-size-fits-all experience, an ICHRA allows you to offer your team a monthly allowance to spend on healthcare the way they want: from health, dental, and vision insurance to out of pocket costs like prescriptions or medical bills. (It's awesome.)
100x more options for your team
Your employees chooses their own health, dental, and vision insurance from dozens of options on the individual market, rather than being forced into one plan. This means they can choose the plan that's best for them given their doctors, prescriptions, and preferences.
It also means you don't have to spend time selecting and managing a plan for everyone.
More efficient use of your healthcare budget
Group health plans are often wasteful, since the budget you provide may go unused and not be fully aligned with each individual’s healthcare needs. For employees who rarely visit the doctor, paying for expensive Gold and Platinum plans doesn't make sense, and creates a mismatch between spend and utilization.
With ICHRA, you're allocating your healthcare dollars towards the most important benefits by setting a defined contribution (monthly allowance) for each employee on your team.
Save money while providing better benefits
Most employers using Thatch save money using an ICHRA instead of a group health plan. The ICHRA allows you to set a fine-grained allowance for every employee, ensuring you're not overpaying for health plans in some markets and underpaying in others.
Frequently asked questions
- How does ICHRA compare to a small group health plans?
- Who is eligible for ICHRA?
- Is there a tax benefit to offering an ICHRA?
- Can ICHRA be used with any insurance plan?
- What happens if employees don’t use their full allowance?
- Can I limit the ICHRA allowance to only health insurance premiums?
- Do I have to offer the same allowance to all employees?
- Can an employer offer both ICHRA and a traditional group health plan?
- How do employees get reimbursed?
- Are there any contribution limits for ICHRA?
- Can I use Thatch to reimburse employees for the premiums related to a plan provided by their spouse or domestic partner?