The ACA has two components when requiring businesses to offer health insurance. The first is Minimum Essential Coverage, which are plans that are on a state or federal exchange. The second is affordability, and the IRS has an affordability threshold that has to be met for you to avoid the “Schedule B Penalty.” Liferaft helps design your ICHRA to ensure that your reimbursement levels will be deemed affordable based on the IRA affordability metric.

Yes, an HRA can satisfy your requirement to offer affordable health insurance. With the HRA, there are specific requirements for setting your reimbursement budget to ensure that you’re meeting the affordability threshold. These requirements are Minimum Essential Coverage and affordability. 

The Liferaft platform verifies that your employees have enrolled in an individual plan and are continuing to pay the premiums. As for enrollments, Liferaft has experienced licensed health insurance agents on staff to assist your employees in choosing and enrolling in a health insurance plan. And depending on your state, we have a network of licensed health agents who also help with employee enrollment.

A Liferaft agent will meet with each employee to advise them to pick a health insurance plan that fits their needs. Once the plan is chosen, employees will receive a login, plan card, access to a mobile application, etc., from the insurance carrier. Going forward, it is up to the employee to manage their plan. HR's only task is accepting or denying the transfer of reimbursement funds, which takes a few minutes each week.

All payments will be made through the Liferaft platform. Once employees accept their HRA benefits in their member dashboard, they’ll be instructed to connect their bank account to their Liferaft account. All reimbursements are automatic direct deposits into the bank account they connected. 

Currently, the Liferaft platform does not integrate with payroll HRIS systems, but we are in the process of building integration tools. However, Liferaft offers several different tools to make HR admin tasks easier.

Liferaft processes all employee claims within 1 business day. Once a claim is approved, funds typically arrive in the employees' bank account within in 3-5 days.

No, there are no contribution caps on the ICHRA or the Standard HRA. If you are setting up an HRA to go alongside your group health coverage, there are different restrictions depending on which HRA type you set up.

HRA reimbursements are tax-deductible for employers and received tax-free by employees. So instead of paying payroll taxes on reimbursements given, the reimbursements will qualify as an employer tax deduction. In addition, employees receive reimbursements without having to recognize income tax.

Reimbursements are typically set based on a percentage of the lowest-cost silver plan offered in your zip code. The budgeting can be set by classes such as age and state. Liferaft will work with leadership to ensure the best budget is in place for both the employee and employer.

With the help of Liferaft and our broker partners, the enrollment process for employees is quick and straightforward. Your employees will need to provide their age, zip code, household income, smoking status, and spouse/dependent's ages. The enrollment occurs online either on healthcare.gov for the federal exchange or on a state-based website for the state exchange. 

Using an ICHRA for health insurance premiums is not a group plan, so employees will be subject to group banding. You can set age bands with an ICHRA. For example, your older employees' health insurance premiums will be more expensive, and you can offer them a higher reimbursement limit than younger employees. Although there is no age banding on traditional group health insurance, your employee’s age impacts the group health premiums.

Employees can choose from dozens (sometimes 100+, depending on zip code) of plans. These plans are often less expensive compared to group plans. In short, you get exponentially more options for less money. 

It will depend on the state that you’re in. For the federal exchange, you will look on healthcare.gov, or there is a state-based exchange for certain states to look at the available plans.

Liferaft will meet with each employees to help them navigate their local marketplace and will recommend the best health insurance plan for their unique situation. Employees will pay their monthly premium and upload an image of their receipt for reimbursement in their Liferaft member portal. Liferaft will then approve or deny the claim. If the claim is approved, the account admin will transfer the reimbursement funds from the business bank account to the employees.

The ICHRA is not a segregated account; there’s no escrow, and the money is in your general bank account. So the only funds ever leaving your company’s bank account are the reimbursements to your employees. Once you set your reimbursement limit at the beginning of the year, and everybody uses the ICHRA benefit every month, you’ll know how much should be spent every year, and there should be no funds left to roll over. 

As the employer, you can decide if you want unused funds for your employees to roll over year-to-year or month-to-month. For example, if you give each employee $100/month or $1,200/year, but an employee only used $600 for the whole year, you can choose to roll that unused amount over to the next plan year.

Dental and vision can be looped into your ICHRA plan. When customizing your plan with Liferaft, employers can decide to reimburse employees for these expenses and premiums. In addition, if you have employees that are over 65  and are paying premiums for Medicare, Medicare Supplement, or Medicare Advantage, the ICHRA can be used to reimburse those expenses.

Employees must be enrolled in a qualified health insurance plan to be eligible for the ICHRA benefit. If employees are covered by a group health plan, including a spouse’s or parent’s plan, they cannot participate in the ICHRA. 

The various employee classes for the ICHRA are as follows:
Full-time employees
Part-time employees
Hourly employees
Salaried employees
Seasonal employees
Employees in a waiting period
Temporary employees that work through a temp agency
Employees covered under a collective bargaining agreement
Employees in different locations, based on rating areas
Foreign employees who are working abroad
Any combination of the options above

It can be intimidating for employees who are used to group health to switch over to an individual plan. But the Liferaft team works to make the transition as seamless as possible. In the end, when we’ve had a company switch to an ICHRA, employees are pleased to find that they can choose the exact plan that works for their situation. Admins have reported that employees are happy with the quality of plans available and appreciate the expanded flexibility.

For businesses with 1-100 employees, the Liferaft HRA will cost $12.50/employee/month. If you have 10 employees or less, there is also a $50/month base fee. For companies with 100+ employees, reach out to sales@liferaft.co for our custom pricing.

Employee Health Plans: If someone is already enrolled in coverage, they can keep that plan regardless of the ICHRA. But, if they don’t have eligible coverage, they may need to change their plan to participate. 

Subsidies:You cannot accept both tax credits and the ICHRA. You can only reject the ICHRA and continue to receive tax credits if the ICHRA is unaffordable. The ICHRA affordability calculation assumes income and benefit amounts, so it will vary by person.

PCORI: All HRA types are subject to the PCORI fee unless the arrangement satisfies the requirements for being treated as an excepted benefit.

Liferaft is the most affordable full-service HRA platform on the market, from establishing a budget to doing hands-on enrollments with employees to providing tax documentation in our 100% digital platform. The Liferaft platform makes it simple to offer your team an HRA. 

Liferaft is an insurtech startup based in San Francisco backed by funding from Costanoa Ventures, Ocean, and XYZ Capital. Liferaft was founded by insurance, technology and financial services professionals in 2020. We have thousands of users on our platform ranging from 2-person startups to 100+ employees in larger companies.

We are delighted to connect you with one of our current clients who closely matches the size and industry of your company. Please reach out to sales@liferaft.co to get connected.