The HRA Council has released its highly anticipated 2023 data report on the state of Health Reimbursement Arrangements (HRAs), featuring insights into Qualified Small Employer HRAs (QSEHRAs) and Individual Coverage HRAs (ICHRAs). The report reveals significant growth in both ICHRAs and QSEHRAs between 2022 and 2023, with a notable increase in the number of American workers benefiting from these tax-advantaged accounts.

ICHRA and QSEHRA Show Significant Growth

According to the report, Growth Trends for ICHRA and QSEHRA 2022-2023, the number of American workers offered insurance through an ICHRA tripled during the reporting period, while QSEHRA offerings, exclusive to small employers with less than 50 employees, doubled. These HRAs provide workers with the flexibility to select ACA-compliant health insurance that best suits their individual needs.

Impact of HRA’s on Small Employers

One constant in both the 2022 and the 2023 reports found that both ICHRAs and QSEHRAs continue to act as an on-ramp to benefits for businesses that have never been able to offer health insurance previously, thereby reducing the number of uninsured individuals. Small and mid-size businesses are now offering HRAs in lieu of traditional group health plans, allowing them to compete with larger corporations in attracting and retaining talent.

Large Employers ICHRA Trends

Employers of all sizes are adopting HRAs, including Large Employers with over fifty full-time equivalent employees.  The adoption of ICHRAs among Applicable Large Employers (ALEs) also experienced significant growth, more than doubling between 2022 and 2023.  This is demonstrated by the significant rise in ICHRA adoption among Large Employers which has grown by 144% over the last year, showing that HRAs are not limited to small businesses.

HRA Trends in the Marketplace

Year after year employees become more informed consumers, with health plan selections funded by ICHRAs evenly distributed among Gold, Silver, and Bronze Metal tiers. This trend demonstrates that employees are actively choosing the coverage that best suits their needs and those of their families, resulting in more personalized and cost-effective healthcare solutions.  Moreover, HRAs strengthen the ACA Marketplace risk pool and promote a healthier workforce, especially by enrolling younger workers, with 61% of ICHRA recipients being younger than 44.

ICHRA and QSEHRAs have emerged as a beacon of hope for employers who are striving to enhance their employee benefits packages and navigate the complexities of healthcare. The exponential growth and impact of HRAs demonstrate their scalability and effectiveness for businesses of varying sizes.  Employers nationwide have the opportunity to seize the advantages of HRAs, fostering a healthier workforce and shaping the future of employee benefits.