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The COVID-19 pandemic has shut down most employers’ efforts to experiment with new types of benefit plans.

But, eventually, when employers have time to consider individual coverage health reimbursement arrangement (ICHRAs) and qualified small employer health reimbursement arrangements (QSEHRAs), financial advisors may have a shot at winning ICHRA and QSEHRA sales away from traditional benefits brokers.

Inci Kaya and Mike Trilli, analysts at Aite Group LLC, talk about the future of ICHRA and QSEHRA in a new personal health benefits account report.

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A QSEHRA lets an eligible smaller employer give workers cash they can use to pay for their own health coverage. The current limits are $5,250 for employee-only coverage and $10,600 for family coverage.

An ICHRA lets an employer of any size provide an unlimited amount of cash employees can use to buy their own coverage. To set up an ICHRA program, an employer must comply with antidiscrimination rules and other rules.

The final QSEHRA regulations came to life in 2017.

The ICHRA program began to start up last summer.

“The COVID-19 pandemic interrupted any potential growth spurt they may have otherwise encountered,” the Aite analysts write.

But ICHRAs could turn out to be more affordable than ordinary group health coverage, the analysts write.

Benefits brokers are not necessarily in a great position to offer HRAs, because they may not have the systems needed to take in HRA claim files, the analysts write.

The analysts suggest that financial advisors with an interest in HRAs could be in a good position to capture HRA market share.

Other entities in a good position to participate in the HRA market include health savings account providers and third party administrators, the analysts write.

Elsewhere in the report, the analysts suggest that:

  • COBRA health benefits coverage will cover fewer than 10% of the workers displaced by turmoil related to the COVID-19 pandemic, because COBRA coverage is usually so expensive.
  • Only about 20% of unemployed are entirely uninsured.
  • A big increase in the number of unemployed workers could lead to a big increase the number of departing workers with “unaffiliated” health savings accounts.

— Read Some State Health Markets Tilt More Toward ICHRAs: Vericredon ThinkAdvisor.

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