ADVANTAGES OF HRA
We recommend:
- QSE-HRA For small employer groups under 50
- ICHRA For large employer groups over 50
Click the button to review the comparison chart. The bottom chart will detail clear advantages of the two.
Not all HRA's are created equal. HRA's are legal plan documents with full customization that the employer and employee can design together. There are HRA's that have advantages for small and large employer groups.
QSE-HRA (GROUPS UNDER 50) |
ICHRA (GROUPS OVER 50) |
| Employees can participate on exchange Employees receive an adjusted subsidy on exchange and employer contribution |
Employees can not participate on exchange Employees can only accept employer contribution, but can't receive tax credits |
| Doesn't satisfy the employer mandate This HRA is tailored for small groups the mandate does not apply |
Satisfies the employer mandate Employers have to meet the affordability threshold to make plans compliant |
| Limit annual contributions QSE-HRA caps how much you can contribute. |
No limits on annual contributions ICHRA allows unlimited annual contributions. |
| Can not offer group Only allowed to offer the HRA, can not offer group. |
Can offer group As long as the ICHRA applies to separate employee class from group. |
| Can offer across State lines This HRA lacks the employee classes, but can be established in multiple states. |
Can offer across State lines Employee classifications allows the ICHRA more plan flexibility in multiple states. |
| Plan continuity Employees keep their plan apart from employer. No lapse in coverage. |
Plan continuity Employees keep their plan apart from employer. No lapse in coverage. |
| Tax treatment is free of payroll tax for both the business and its employees. It's also free of income tax for employees. It's available to businesses of 50 and under. |
Tax Treatment is free of payroll tax for both the business and its employees. It's also free of income tax for employees. It's available to businesses of all sizes. |