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More states could soon offer state income tax credits to employers that sponsor individual coverage health reimbursement arrangement plans.
A committee at the National Council of Insurance Legislators has put an ICHRA tax credit model bill on its agenda for an in-person session set to take place April 18, at an NCOIL meeting in Louisville, Kentucky.
Ohio state Rep. Meredith Craig, the sponsor, based the model on a bill she's sponsoring in Ohio.
The model bill would provide a tax credit for businesses with two to 50 employees that offer an ICHRA plan.
"This is something that has bipartisan support at both the state and federal levels," Craig said March 12 during an online meeting organized by NCOIL's Joint State-Federal Relations & International Insurance Issues Interim Committee, according to draft meeting notes.
The bill simply offers a tax incentive and would not impose any mandates, Craig said.
Representatives from two health insurers, Centene and Oscar Health, spoke in favor of the ICHRA tax credit model during the NCOIL committee's online meeting.
Indiana enacted an ICHRA tax credit in 2023, and Georgia has been considering a bill similar to Craig's bill.
What it means: Some members of state legislatures are working actively to create tax incentives for ICHRA plan sponsors.
Individual coverage health reimbursement arrangement plans: An employee with an ICHRA plan can use employer cash to buy individual or family major medical coverage.
ICHRAs are helping some employers replace traditional group health coverage with "cash for coverage" plans.
National Council of Insurance Legislators: NCOIL is a group for state senators, state representatives and other types of state lawmakers with an interest in insurance.
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