(FinancialHealth.net) – President Trump has created an exciting new option for employee health insurance plans. The change makes it easier for some workers to choose plans that better fit their families. The new option is known as an individual coverage health reimbursement arrangement (ICHRA).
If your employer goes this route, it provides tax-free money through a Health Reimbursement Arrangement (HRA). Employees will then have a portion of the cost of their health insurance plan reimbursed from the HRA fund. You also won’t have to worry about losing your health insurance if you lose your job, although you can only take your HRA with you if your new employer also offers it.
There are some rules to be aware of. First, employees may only be reimbursed for plans that comply with the Affordable Care Act. If an employee doesn’t use their entire subsidy, then the employer may allow them to use the rest on other healthcare expenses.
Employers will set up the fund, and it must cover at least the cheapest silver plan available through healthcare.gov without costing more than 10% of the employee’s household income. The pay-out and size of the subsidy is something that will differ from employer to employer.
The great part about the plan is that you won’t be forced to buy into an employer’s insurance policy that doesn’t work for you. If your employer goes with this option, you’ll be able to shop around on healthcare.gov and compare plans to see which one works best for your family.
For example, maybe you want something with a low premium but don’t care if the deductible is high. Or you want a low deductible and are willing to pay a higher premium. You can decide.
It sounds like this is a great new option for everyone involved.
~Here’s to Your Financial Health!
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