Beginning in 2020, small businesses are expected to have a new health benefits option: the individual coverage health reimbursement arrangement (ICHRA).
Unlike other HRAs, the ICHRA can be used by businesses of all sizes and there are no allowance caps. The business can set allowances to match their budget, and they have the freedom to choose different allowance amounts for nine defined employee classes.
Participating in a group health insurance plan won’t disqualify businesses from participating in the ICHRA, so long as the same employee class is not offered a choice between the ICHRA and group coverage. In order to participate, employees must be enrolled in an individual health insurance policy. They can be the primary policyholder or they can be covered under a family member’s individual policy.
The ICHRA can be used to reimburse individual health insurance premiums, but also a wide variety of other expenses. In this post, we’ll examine eligible expenses under the ICHRA.
Let’s get started.
Which medical expenses are eligible under the ICHRA?
Just like with other HRAs, employees can be reimbursed up to their available allowance for eligible expenses. Under the ICHRA, all expenses listed in IRS Publication 502 (IRC Section 213(d)) are eligible for reimbursement. The business can limit these expenses by defining will be eligible in the plan documents.
Here are some of the most popular expenses that will be eligible for reimbursement under the ICHRA:
- Alcoholism treatment
- Ambulance transportation
- Artificial limbs
- Blood tests
- Chiropractic care
- Contraceptive devices, pills, patches, and injections
- CT scans
- Dental treatment (office visits, fillings, crowns, cleanings, x-rays, etc)
- Doctor’s visits
- Hospital stays
- Insulin treatment
- Lab tests
- Mental health therapy
- Oxygen supplies
- Physical therapy
- Prenatal care
- Prescription medications
- Vision (eyeglasses, contacts, contact solution, Lasik surgery, office visits)
Non-eligible expenses include:
- Athletic Clubs (Except when prescribed for the treatment of a specific condition)
- Cosmetic Surgery
- Cosmetic Dentistry
- Maternity clothes
- Non-medical Dermatology
- Non-prescription medicine
Make sure to check out IRS Publication 502 (IRC Section 213(d)) for a full list of all eligible expenses and our other blog posts for more information about personalized benefits.