Since the new accountsbecame available on January 1, employers have offered an average of$5,971 to single employees and $12,892 for families. (Photo:Shutterstock)

Good thing there's not an allowance cap on individual coveragehealth reimbursement arrangements – as employers on average areoffering more in these new accounts than the caps set on smallemployer health reimbursement arrangements, according toPeopleKeep's report, "What we learned in the first 90 days of theindividual coverage HRA."

Since the new accounts became available on January 1, employershave offered an average of $5,971 ($743 per month) to singleemployees, and $12,892 ($1,074 per month) to employees with afamily, according to the report. That is more than 1.8x the averageallowance offering for single employees using the QSEHRA in 2019,and 2.6x the average allowance for employees with a family.

Related: Who are the early-adopters ofICHRAs?

In 2020, employers offering the QSEHRA are restricted tooffering single employees $5,250 per year ($437.50 per month). Foremployees with a family, employers are restricted to $10,600($883.33 per month). ICHRA users, on the other hand, are able toset whatever allowance they like and offer it to specified employeeclasses.

"This report demonstrates that employers are not only willing,but prefer to offer more than the allowance limits that thegovernment sets for the QSEHRA," says PeopleKeep's CEO VictoriaHodgkins.

The analysis also found that within the first 90 days, 48percent of employers opted for the premium-only ICHRA, and 52percent chose to also cover out-of-pocket expenses. Employersoffering the premium-only ICHRA offered an average annual allowanceof $5,544 ($462 per month) to workers, while employers offering thepremium-plus ICHRA offered $17,292 per year ($1,441 per month).

In both options, the average employee has enough ICHRA allowanceto exceed the nationwide average premium cost for individual healthinsurance — $5,280 per year ($440 per month) for individuals and$14,016 per year ($1,168 per month) for families, according to thereport.

Other key findings include:

• "Micro" employers with only a few employees in a certain classoffer a much higher allowance than larger employers.
• While workers have the chance within the first 90 days toopt-out of the benefit to use premium tax credits instead,PeopleKeep's analysis found that 75 percent of all employees whoare offered the ICHRA remain opted into the benefit. In contrast,the minimum required opt-in rate for group health insurance is 70percent.
• In the first 90 days, the most commonly used employee classesare full-time salaried; full-time; and salaried. There is also astrong interest in creating an employee class for workers in adifferent state than the main headquarters where workers often havea group health plan that doesn't extend well to the new satelliteoffice location.
• The most common out-of-pocket expenses submitted forreimbursement were: prescription drugs (61 percent of submittedexpenses); medical office visits (13 percent); and chiropracticcare (5 percent).

"Hundreds of employers throughout the United States are nowoffering the brand new benefit through PeopleKeep, and employeesare engaging at a high rate," says Hodgkins. "Looking ahead, we areconfident that engagement will only increase as employeesunderstand the health benefit better. And although there is room toimprove some of the regulatory issues, such as the 90-day advancenotice requirement, the ICHRA has some good early traction and canonly get better."

Read more: 

• 3 important details in the new individual coverageHRA regs
• Experts warn HRA expansion could hurt workers,drive up premiums
• 9 Top FAQs about HSAs, FSAs, andHRAs