HRA card Employees do not own the HRA value, the way they own the assets inside an HSA, but they can combine an HRA with health coverage at any deductible level. (Photo: Shutterstock)

A new HRA Council held its first meeting Friday, and the founding member list could give hints about which insurers have the strongest interest in the commercial individual major medical insurance market.

Related: ICHRA has potential to reshape the way employers pay for benefits

Organizers of the Washington-based group say it will be a non-partisan, nonprofit coalition that will promote awareness of health reimbursement arrangements (HRAs), help develop HRA standards, share HRA research, and work to shape HRA regulations.

HRA basics

In the past, an HRA was a mechanism that an employer could use to provide cash that employees could use to handle out-of-pocket medical costs, such as deductibles, co-payments and payments for medicine, crutches and wheelchairs.

The HRA program is older than the better-known health savings account program. Employees do not own the HRA value, the way they own the assets inside an HSA, but they can combine an HRA with health coverage at any deductible level. HSA holders must combine their HSAs with high-deductible health coverage.

Now, employers also can use HRAs to give employees cash that the employees can use to pay for their own individual or family major medical coverage: the qualified small employer health reimbursement arrangement (QSEHRA) and the individual coverage health reimbursement arrangement (ICHRA).

The QSEHRA: Congress included a provision creating the QSEHRA in the 21st Century Cures Act of 2016. An employer with fewer than 50 full-time equivalent employees can use a QSEHRA program to provide cash for coverage. The 2021 employer contribution limits are $5,300 for individuals and $10,700 for families.

The ICHRA: Officials in the Trump administration created the ICHRA program. The ICHRA program regulations give employers of any size the ability to provide any amount of cash that employees can use to pay for their own individual or family health coverage. One challenge for would-be ICHRA sponsors is that the program includes many rules meant to keep employers from discriminating against older or sicker employees.

The HRA Council

Ken Janda, the former CEO of Community Health Choice Inc., a Houston-based health insurer, is the interim CEO of the HRA Council.

The companies with logos on the company’s homepage are HealthOne, Flyte Human Capital Management, Friday Health Plans, Wild Blue Health Solutions, Vericred, Take Command Health, the National Federation of Independent Business, OneBridge for Your Benefit, NexBen, The ICHRA Shop, Benefit Comply and OneDigital.

The council reported in its launch meeting announcement that founding members include a number of other health plan administrators.

Friday Health Plans is a Denver-based health insurance company startup. The other health insurers on the council founding members list are Centene Corp., Common Ground Healthcare Cooperative, Blue Cross Blue Shield Minnesota and Oscar.

Centene has acquired several traditional health insurers, including Health Net, and it and Minnesota Blue are the only big, traditional health insurers on the founding member list. Common Ground Health Cooperative is a nonprofit, member-owned carrier that was created with Affordable Care Act CO-OP program financing. Oscar is a health insurance startup that, like Friday Health Plans, was created outside of the Affordable Care Act CO-OP framework.

The HRA Council founding member list may hint at which health insurers are hungriest for individual major medical insurance business.

Cathy Mahaffey, the CEO of Common Ground, said in a statement that her company is thrilled to be part of the council.

“As a health insurer, we’re seeing more and more interest from employers in offering HRAs to their employees,” Mahaffey said. “HRAs give employers more control over their costs and allow them to hand over the purchasing decisions to their employees.”

Nick Knab, the One Bridge CEO, said the council can help increase workers’ ability to choose their own health coverage.

“Selecting a Medicare plan should not be an individual’s first opportunity to choose a health coverage option that’s best for them,” Knab said.

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