Health Benefits for Applicable Large Employers (ALEs)

Do I have to offer health insurance?

This is one of the most common questions we hear, and the answer is simple: Yes.

All applicable large employers (ALEs) are required to offer affordable health benefits to employees. An ALE is any employer with 50 or more full-time equivalent employees. This rule is commonly referred to as the employer mandate.

The individual coverage HRA (ICHRA) is one solution that ALEs use in order to satisfy the employer mandate. Providing an allowance that is considered affordable is an important part of ensuring you satisfy the employer mandate. Alternatively, the group coverage HRA is an option that can be used directly with group health insurance to lower insurance costs for employers.

The Problem

For many ALEs, successfully offering a group health plan is challenging. Ultimately It’s expensive, and finding one that fits each employee’s individual needs can be hard. That’s where an HRA performs best. With it, employers have more control over their health benefits budget.

For ALEs, the employer mandate requires them to offer a qualified and affordable health benefit. Some other obstacles include: having employees in multiple states, and wanting to offer different benefits to individual employee classes.

individual coverage hra, ICHRA, software

The Solutions

The individual coverage HRA (ICHRA) can work for virtually any employer, but it works best for employers that can’t afford group health insurance, and that want greater control over their health benefits budget. One of the great things about an ICHRA is its ability to function as an alternative health benefit for employees that aren’t covered under an employer’s group health plan.

For example, it can be used for employees that live out of state, or even for an employee class that is not included in the group health plan, such as part-time employees, or even seasonal workers.

Learn about employee classes

Another option, the group coverage HRA (GCHRA), allows employers to save on premium costs if used alongside an optional high deductible health plan (HDHP). With it, an employer can set allowances to offset employee's deductibles, while utilizing cost-sharing to further control spend. Employees must be enrolled in an organization's group health insurance plan to be eligible.