This article is for admins who want to learn about Health Reimbursement Arrangements (HRAs) and how to offer one through Gusto.
A Health Reimbursement Allowance, is a health benefit where employers give employees a fixed monthly stipend to use on health insurance purchased on the individual marketplace.
If you want to offer an HRA to your team, we recommend Thatch. They offer flexible policies and specialize in HRA administration. To learn more, head to this link to set up a new HRA or speak with an expert.
Thatch offers Individual Coverage Health Reimbursement Arrangement (ICHRA) administration. At this time, you cannot offer ICHRA benefits alongside small-group health insurance offered through Gusto. Gusto does not offer a QSEHRA at this time. For a comparison of HRA plan types, go to our QSEHRA and ICHRA Health Reimbursement Arrangements article.
When you enroll with Thatch from within Gusto, your company information syncs between the two platforms, and Gusto will automatically handle any necessary payroll deductions for your employees.
If you would like to explore an HRA for your organization, head to the HRA benefits page. Select Get started on Thatch to be taken to Thatch’s website.
Follow their onboarding instructions and check out Thatch's help center if you need help along the way.
Once you set up your allowance and invite your first employee, your HRA benefit will show up on Gusto and you can see who is enrolled. For any changes to your plan, including adding new employees, do this on Thatch.
HRA contributions affect taxes differently for employers and employees. Here’s what you need to know:
Employer HRA contributions are tax-free as long as you set them up and manage them according to Internal Revenue Service (IRS) requirements, and only use them for eligible medical expenses.
Employees are eligible for payroll deductions only if the plan they enroll in is more expensive than the allowance you provide. Thatch and Gusto help you manage this so your employees make the most of their benefit.
Small businesses can offer these reimbursement arrangements without violating Affordable Care Act (ACA) rules. However, every situation is different. Consult a licensed professional or tax consultant before choosing this option.