|Employer eligibility requirements||Available to businesses of any size with or without group insurance, as long as group health and ICHRA are not offered to the same employee classes.||Available to businesses with fewer than 50 full-time equivalent employees who don’t offer a group health plan.|
|ACA employer mandate||May satisfy the employer mandate for ALEs (applicable large employers) if coverage is affordable and offered to more than 95% of full-time employees.||Not available for ALEs (applicable large employers) with over 50 full-time equivalent employees. Only ALEs are subject to the employer mandate.|
|Employee eligibility||The business can structure eligibility guidelines based on predefined employee classes, such as full time, part-time, salaried, hourly and seasonal. Employees must have qualified individual health insurance to participate.||All full-time employees are automatically eligible. Businesses can choose to extend eligibility to part-time employees, but must offer the same allowances to both groups. Employees aren’t required to have individual health insurance.|
|Annual allowance caps||None.||The following caps exist:
Month-to-month rollover of unused funds, with no annual rollover.
Month-to-month rollover of unused funds, with no annual rollover
|Budgetary guidelines||Businesses can offer different allowance amounts to different employees based on classes as well as employee family status.||Businesses can offer different allowance amounts to different employees based on family status.|
|Premium tax credit guidelines||Employees can’t have both the premium tax credit and the ICHRA. They may waive premium tax credits and participate in the ICHRA, or opt-out of the ICHRA and collect premium tax credits if the HRA allowance amount is considered unaffordable.||Employees with premium tax credits can participate in the QSEHRA, but their premium tax credit will be reduced by the amount of their QSEHRA allowance. Employees cannot opt-out of the QSEHRA.|
|Best suited for||Companies that:
A1 HVAC Company wants to offer a health benefit to its employees for the first time, but doesn’t want to deal with the headache and cost of group health insurance. A1 has 10 employees:
The company has a limited budget for benefits, but still wants to provide a valuable benefit to all its employees. Robin decides to distinguish allowances by family status, offering $400 per month for employees with families and $200 per month for single employees.
Three of A1’s employees qualify for premium tax credits, one is on a health care sharing ministry plan, and three are on their spouse’s insurance. The others are planning on buying individual health insurance policies with their allowance.
|Name||Position||Family status||Qualify for PTC?||Insurance status||Part time vs. full time|
|Debbie||Office support||Has a family||No||Spouse’s insurance||Part time|
|Kevin||Office support||Has a family||No||Spouse’s insurance||Part time|
|Ida||Installation tech||Has a family||No||Health care sharing ministry||Full time|
|Adrian||Installation tech||Has a family||No||Spouse’s insurance||Full time|
|Raymond||Installation tech||Single||Yes||Uninsured||Part time|
|Hannah||Installation tech||Single||Yes||Uninsured||Part time|
|Lee||Installation tech||Single||Yes||Individual insurance policy||Part time|
*Because A1 files as an S corp, Robin as owner is ineligible to participate in either a QSEHRA or an ICHRA. For more information, see our business owner eligibility infographic.