Although lawmakers of both parties failed to include a law concerning Individual Coverage Health Reimbursement Arrangements (ICHRAs) into the One Big Beautiful Bill Act (OBBBA), efforts are underway to “reboot” ICHRA through a stand-alone bill. Republican lawmakers in the House and Senate have both introduced versions of a new ICHRA bill. Supporters of ICHRAs praise them for expanding access to more affordable and portable health coverage options. ICHRAs also may allow individuals to purchase plans customized to their needs.
In the past, ICHRA bills enjoyed broad bipartisan support, but Democratic cosponsors have yet to sign on to support the reboot bills. Some hope that the traditionally bipartisan legislation may bring Democrats and Republicans back to the negotiating table and ultimately end the current government shutdown. A stable insurance market is crucial to the success of ICHRAs. Currently, the impending expiration of ACA individual health insurance premium tax credit subsidies threatens to destabilize the insurance market, thus giving ICHRA supporters an incentive to bring the two parties together to try to repair the situation.
Many employers have supported the idea of ICHRAs for decades, which would effectively allow them to give workers cash to purchase their own individual or family health coverage. Thanks to the Affordable Care Act (ACA), which changed major medical underwriting rules, ICHRA, and Health Reimbursement Arrangements (HRAs), employers have ways to give financial incentives to employees to purchase their own health coverage through the ACA public exchange system.
On the other hand, critics of ICHRA argue that it will allow employers to water down health benefits and increase the already massive $231 billion federal income tax exclusion. Another concern expressed by some House Ways and Means Committee members, which governs House health account bills, is the fact that ICHRAs mainly meet the needs of high-income people, not low and moderate-income people.
The new ICHRA bills are similar to the provisions added to, and later removed from, the OBBBA earlier this year. The bills would rename ICHRAs and establish them as part of federal law, as well as simply and clarify existing rules, particularly about taxation of the money that employers give to employees.
Still, the future of ICHRA legislation this year is uncertain. For example, the opinion of Daniel Aronowitz, a longtime benefits attorney and insurance executive who is the newly confirmed assistant U.S. Labor secretary over the Employee Benefits Security (EBSA), may be crucial to its success. Likewise, Mark Bertolini, the new chairman of the board at Verizon, has long been an ICHRA supporter. His new position on the board of one of America’s biggest and most influential employers may also impact the fate of ICHRA legislation. Bertolino, CEO of Oscar Health, may also have a direct line to President Donald Trump, as the cofounder of Oscar is Joshua Kushner, brother of Trump’s son-in-law, Jared Kushner.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
Hall Benefits Law, LLC
Latest posts by Hall Benefits Law, LLC (see all)
- Colorado First State to Place Price Cap on Prescription Drug - November 27, 2025
