This document compares the Individual Coverage Health Reimbursement Arrangement (ICHRA) and the Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). It discusses eligibility requirements for employers and employees, allowance caps and budgetary guidelines, premium tax credit compatibility, and considerations for which arrangement may be a better fit depending on an employer's needs and budget. The presenter concludes by describing the ICHRA offering available from PeopleKeep starting in September 2019.

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The ICHRA vs. the QSEHRA:
Which is right for your business?

2. JD Cleary, Director of Sales and Business Development
An expert in small business benefits, J.D. has worked with owners and
advisors to navigate the landscape of small business benefits. If he’s not
exploring the beautiful outdoors in Utah with his family, you’ll probably
find him cheering on his alma mater Villanova or any Boston sports team.
Connect on LinkedIn at https://www.linkedin.com/in/jdcleary/.
About the presenter
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3. Our story
PeopleKeep helps small businesses offer competitive
benefits at a price they can afford. Personalized benefits
automation software from PeopleKeep allows businesses
to manage their benefits in minutes per month.
PeopleKeep automates benefits compliance and employee
support. Employees receive tax-advantaged
reimbursements to pay for health insurance and other
medical, dental, and vision expenses. Today more than
3,000 companies across the United States trust PeopleKeep
to automate their benefits and keep employees happy.
PeopleKeep is based in Salt Lake City, Utah.
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4. Agenda
Employee eligibility
Allowance caps and budgetary guidelines
Premium tax credit guidelines
Employer eligibility
So, which is right for my business?
HRAs: A brief background1
2
3
4
5
6
Q&A
7
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The PeopleKeep ICHRA
8

5. HRAs: a brief background
How does it work?
1. Business offers a
monthly allowance.
The allowance represents the
maximum amount for which
the business will reimburse
the employee.
2. Employees purchase
health care.
All items listed in IRS Publication
502, including individual health
insurance premiums, are
reimbursable.
3. Business
reimburses
employees.
Reimbursements are free of
payroll tax and income tax.
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6. 2002–2012 Stand-alone health reimbursement arrangements
(HRAs) are available with little federal regulation.
2013 IRS Notice 2013-54 says only one-person HRAs and retiree
HRAs can integrate with individual coverage.
2016 The 21st Century Cures Act creates the qualified small
employer HRA (QSEHRA).
2018 Federal Departments release proposed rule
expanding HRAs in response to an executive order.
2019 Federal Departments finalize rule creating two new
HRAs.
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HRAs: a brief background

7. The final rule does 4 important things:
Revises IRS
Notice 2013-54
to allow HRAs to
integrate with
individual health
insurance under
certain
circumstances
1
Creates the
individual
coverage HRA
(ICHRA), effective
January 1, 2020
2
Creates the
excepted benefit
HRA, effective
January 1, 2020
3
Establishes a
special
enrollment
period for
employees
newly eligible for
ICHRA and
QSEHRA
4
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HRAs: a brief background

8. Employer eligibility
Who can offer the ICHRA and the QSEHRA?
● Available exclusively to businesses with
fewer than 50 employees
● Businesses cannot offer a group
medical, dental, or vision plan
QSEHRA
● Available to businesses of all sizes
● Business can offer a group health
insurance plan, but employees can’t
have a choice between group and the
ICHRA
ICHRA
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9. Employee eligibility
Who can participate in the ICHRA and the QSEHRA?
● Full-time employees are automatically
eligible; part-time employee eligibility up
to business
● Employees can participate with:
○ Individual health insurance
○ Spouse’s group insurance
○ Alternative or no insurance, on a
taxable basis
QSEHRA
● Businesses can set eligibility
according to 11 classes, including:
○ Full-time vs. part-time
○ Salaried vs. hourly
○ Seasonal
○ Employees in different
locations
○ Combination of the above
● Employees must have individual
health insurance to qualify
ICHRA
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10. Employee eligibility
More on ICHRA classes
Businesses can set different
allowance amounts for 11 classes:
● Full-time or part-time employees
● Salaried or hourly employees
● Seasonal employees
● Temporary employees
● Employees in different locations
● Employees in a waiting period
● Employees covered under a collective
bargaining agreement
● Foreign employees who work abroad
● A combination of two or more classes
Businesses can set different allowance
amounts within classes based on:
● Age
○ Can offer up to 3 times as much to the
oldest employees in the class vs. the
youngest employees in the class
● Number of dependents
○ Can offer more to employees with
additional dependents with no
restrictions
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11. Allowance caps and budgetary guidelines
What are the rules?
● Allowances capped at $5,150/single
and $10,450/employees with a family in
2019
● Different allowance amounts available
based on age and family size
QSEHRA
● No allowance caps
● Different allowance amounts
available based on 11 employee
classes as well as age and family size
ICHRA
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12. Premium tax credit guidelines
Are they compatible with ICHRA and QSEHRA?
● Employees must reduce PTC by
amount of QSEHRA allowance
● Employees can’t opt out of QSEHRA
QSEHRA
● Employees can’t have both ICHRA
and PTC
● Employees can waive ICHRA and
claim PTC if the ICHRA allowance is
“unaffordable”
ICHRA
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13. Premium tax credit guidelines
ICHRA affordability calculation
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ICHRA is considered affordable if:
Employee’s required HRA contribution < (Employee’s household income x Required
contribution percentage)
Where:
● Employee’s required HRA contribution = ($ lowest-cost Silver plan for single
coverage) - (ICHRA allowance amount)
● Employee’s household income = (Annual household income)/(12)
● Required contribution percentage (2020) = 9.78%

14. Other considerations
ICHRA notification requirement
The HRA must provide a written
notice to each participant at
least 90 calendar days before
the beginning of each plan year
ICHRA
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Model notice

15. So, which is right for my business?
Important considerations
Likely a better fit if:
● Want to provide a benefit to all eligible
employees, regardless of where health
insurance is secured
● Comfortable with minimal allowance
variation
● Budget under allowable limits
● May make last-minute decision to offer
HRA for January
QSEHRA
Likely a better fit if:
● Want to provide benefits to
employees not eligible for group
coverage
● Prefer to offer a benefit only to
employees with individual coverage
● Believe classifications are a useful
recruiting/retention feature
● Higher relative monthly budget
ICHRA
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16. The PeopleKeep ICHRA
● Available beginning September 26,
2019 for January 1, 2020, benefit start
dates.
● Premium-only. We’re working on our
Premium+ ICHRA.
● Available classes:
○ Full-time employees
○ Part-time employees
○ Salaried employees
○ Hourly employees
○ Employees in state
○ Employees out of state
○ Any combination of the above
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17. Want to learn more?
Visit PeopleKeep.com
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18. Thank you for attending today’s
webinar!