An employer offer of a Health Reimbursement Arrangement (HRA) in 2026 changes how you buy health insurance, and the offer starts a clock. Three versions exist: the Qualified Small Employer HRA (QSEHRA) for employers with fewer than 50 full-time equivalent employees, the Individual Coverage HRA (ICHRA) for employers of any size, and the older integrated HRA that sits on top of a group plan. QSEHRA and ICHRA both reimburse you for premiums on an individual plan you buy yourself, usually through healthcare.gov or a state exchange such as Covered California, MNsure, or kynect. Healthcare.gov treats the offer as a qualifying life event: you qualify for a Marketplace Special Enrollment Period (SEP) if the offer arrived within the past 60 days or you expect one within the next 60 days. Because an HRA offer also changes your Premium Tax Credit eligibility, enrolling without checking the rules can cost you thousands of dollars on your 2026 tax return. The first decision is whether to accept the HRA or decline it and keep your subsidy.
Affordability decides which choice saves money. For 2026, an ICHRA or QSEHRA is treated as affordable when the lowest-cost Silver plan in your rating area, minus the monthly HRA amount, costs 9.96% or less of your household income per IRS guidance. An affordable ICHRA generally ends your Premium Tax Credit eligibility if you accept it, while an unaffordable ICHRA lets you decline the HRA and claim the credit instead. The enhanced subsidies from ARPA and the IRA expired January 1, 2026, so the 400% FPL subsidy cliff ($63,840 for a single person in 2026) is back, and an HRA can be worth more than a reduced credit near that line. Small QSEHRA employers set the monthly allowance themselves, up to $6,450 for self-only coverage or $13,100 for family coverage in 2026 under IRS limits. Workers with low household income should also screen for Medicaid first: an HRA offer never blocks Medicaid or CHIP eligibility, and both programs enroll year-round.
6 Steps to Get Coverage
Common Mistakes That Cost People Thousands
Five mistakes cost workers the most when an employer offers an HRA:
- Accepting an affordable ICHRA and still claiming the Premium Tax Credit. The IRS requires you to repay the credit on Form 8962 for every month the ICHRA was affordable and you were covered or eligible, which can mean a bill of several thousand dollars in 2026.
- Waiting for open enrollment instead of using the 60-day SEP. The HRA offer is a qualifying life event, and waiting until November 1, 2026 can leave you uninsured for months while the employer stops paying toward a group plan.
- Trying to enroll online at healthcare.gov under the HRA SEP. Healthcare.gov requires you to call the Marketplace Call Center for this SEP, so applicants who only use the website often select the wrong SEP and get denied.
- Skipping the Medicaid check. An HRA offer does not block Medicaid or CHIP, and Medi-Cal, AHCCCS, MassHealth and other state programs cost nothing for households under 138% FPL in 2026 in expansion states.
- Buying a plan that is not individual-market coverage. ICHRA and QSEHRA reimburse premiums only for qualifying individual coverage, so short-term plans and health sharing ministries are not eligible for tax-free reimbursement.
QSEHRA vs ICHRA vs Integrated HRA: What Your Employer Actually Offered in 2026
Qualified Small Employer HRAs (QSEHRA) are limited to employers with fewer than 50 full-time equivalent employees that do not offer a group health plan. The 2026 IRS limits are $6,450 for self-only coverage and $13,100 for family coverage, and the employer must give written notice of the benefit before the plan year begins. Individual Coverage HRAs (ICHRA) have no federal dollar cap and are open to employers of any size, and the employer can set different allowances by class of employee, such as full-time versus part-time or by age band. Integrated HRAs differ from both: they sit on top of a group health plan and reimburse deductibles and copays, which means no Marketplace SEP follows from an integrated HRA alone. Only QSEHRA and ICHRA offers trigger the Marketplace SEP described on healthcare.gov. Check the first page of the notice for the words QSEHRA or ICHRA, and call HR if the document only says HRA. The type decides your SEP rights, your affordability test, and your tax treatment.
Accept the HRA or Keep the Premium Tax Credit: The 2026 Affordability Test
The affordability test compares the lowest-cost Silver plan in your rating area, minus the monthly HRA allowance, against 9.96% of your household income for 2026. An ICHRA that passes the test counts as affordable employer coverage, so you cannot claim the Premium Tax Credit for any month you are covered by it or eligible for it. An ICHRA that fails the test is unaffordable, and you may decline it in writing and claim the credit instead. QSEHRA follows a related rule: an affordable QSEHRA generally ends credit eligibility, while an unaffordable one reduces the credit dollar for dollar. Example: a single worker with 2026 income of $50,000 sees a benchmark Silver premium of $550 per month and an ICHRA allowance of $300 per month. The net cost is $250 per month, or $3,000 per year, which is 6% of income and affordable, so the worker cannot also take the credit. Run your own numbers at healthcare.gov before accepting, and file Form 8962 with your 2026 return to reconcile any credit.
Medicaid and CHIP Still Apply After an HRA Offer in 2026
Medicaid eligibility in 2026 depends on household income, not on an employer's HRA offer. Medicaid is income-gated at 138% of the Federal Poverty Level in the 40 expansion states plus DC, which means $22,025 for a single person or $45,540 for a family of four in 2026. State programs go by different names: Medi-Cal in California, AHCCCS in Arizona, MassHealth in Massachusetts, BadgerCare in Wisconsin, HUSKY Health in Connecticut, Apple Health in Washington, and NJ FamilyCare in New Jersey. The 10 non-expansion states (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, Wyoming) have stricter adult income limits, so an HRA plus a Marketplace plan is often the only route there. CHIP covers children in families with incomes up to 200% to 300% FPL depending on the state, even when a parent does not qualify, and CHIP enrolls year-round at healthcare.gov or through your state Medicaid agency. Children in a household with an ICHRA can enroll in CHIP while the adult takes the HRA.
Documents You Need and Why Each One Matters for an HRA SEP
Three documents decide whether your HRA enrollment succeeds. First, the written HRA notice proves the qualifying life event and states the allowance and effective date, which the Marketplace Call Center agent uses to confirm your 60-day window. Second, income records support the projected 2026 MAGI that drives both the Premium Tax Credit and the affordability test, so use realistic current-year income rather than last year's tax return. Third, monthly premium receipts or the plan confirmation prove you hold qualifying individual coverage, which your employer requires before reimbursing any dollar from the HRA. Keep your Marketplace 1095-A and your HRA reimbursement records together for your 2026 tax filing, since the IRS compares them on Form 8962. A mismatch between the credit you received and the HRA you used is the most common reason refunds are reduced.
Frequently Asked Questions
What is the Special Enrollment Period when my employer offers an HRA, QSEHRA or ICHRA?
Healthcare.gov grants a 60-day Special Enrollment Period (SEP) if you received an HRA, QSEHRA, or ICHRA offer in the past 60 days or expect one in the next 60 days. For example, if your HRA starts January 1, 2027, your SEP opens November 2, 2026 and closes March 2, 2027. You must enroll by calling the Marketplace Call Center at 1-800-318-2596, because this SEP cannot be completed online. State-exchange residents contact their own exchange. Missing the window usually means waiting for Open Enrollment, which runs November 1, 2026 to January 15, 2027 for 2027 coverage.
How do I document the HRA offer for the SEP application?
Healthcare.gov requires written proof that your employer made the HRA offer. Use the employer's HRA notice or benefits letter, which should state the HRA type (QSEHRA or ICHRA), the monthly allowance, and the effective date. Have the notice ready when you call the Marketplace Call Center and report the offer as your qualifying life event. A verbal statement from a supervisor is not enough. Employers generally must deliver the notice at least 90 days before the plan year starts, so request it from HR in writing if you have not received it.
What if I miss the 60-day SEP window after my employer offers an HRA?
Missing the 60-day SEP means you generally cannot enroll in a Marketplace plan until the next Open Enrollment Period, which runs November 1, 2026 to January 15, 2027 for 2027 coverage. You would have no individual coverage for the gap, and your employer's HRA cannot reimburse premiums for plans you do not hold. Medicaid and CHIP remain available year-round if your income qualifies (under 138% FPL, $22,025 single in 2026, in expansion states). Another qualifying life event, such as a move or a loss of coverage, can open a new SEP.
Can I get retroactive coverage when my employer offers an HRA?
Marketplace coverage under the HRA SEP is not retroactive. Coverage generally starts the first day of the month after you select a plan, and plan selection made before the HRA effective date can start coverage on that date. Any care received in a gap before your plan starts is paid out of pocket, and the HRA cannot reimburse premiums for months you were not enrolled. Medicaid is the exception: some states cover medical bills for up to three months before your application month if you were eligible then, so apply early if you have recent bills.
What is the difference between COBRA and Marketplace coverage when my employer switches to an HRA?
COBRA applies only if your employer ended its group plan, and it lets you keep that plan for up to 18 months at 102% of the full premium, typically $400 to $900 per month for an individual in 2026. Marketplace plans bought with an ICHRA or QSEHRA are reimbursed by the HRA, and Marketplace Premium Tax Credits can cut a Silver premium to $10 to $300 per month for many enrollees in 2026. COBRA mainly makes sense to protect a specialist relationship or a met deductible. The COBRA election window is 60 days from the plan's end.
What state-specific rules affect my HRA options in 2026?
State exchange residents enroll through their own exchange rather than healthcare.gov, including Covered California, MNsure in Minnesota, and kynect in Kentucky, and each exchange runs its own process for the employer-offer SEP. Medicaid expansion status also varies: 40 states plus DC cover adults under 138% FPL, while Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming do not. State programs use brand names such as Medi-Cal, AHCCCS, MassHealth, and BadgerCare. Check your state exchange or state insurance department for local ICHRA enrollment steps.
Do I qualify for Medicaid after my employer offers an HRA?
Yes, if your projected annual household income falls under 138% FPL in one of the 40 Medicaid expansion states plus DC. For 2026 that is $22,025 for a single person or $45,540 for a family of four, and the table above lists all household sizes. An HRA offer does not affect Medicaid eligibility, and Medicaid enrollment is year-round. Apply at healthcare.gov or through your state Medicaid agency, which screens for both Medicaid and Marketplace savings. If you qualify for Medicaid, you generally do not need to use the HRA for individual coverage.
What happens to my children's coverage when my employer offers an HRA?
Children can be covered by your Marketplace plan, reimbursed through a family-level QSEHRA ($13,100 in 2026) or an ICHRA that includes dependents, or enrolled in CHIP. CHIP covers children in families with incomes up to 200% to 300% FPL depending on the state, with premiums of $0 to $50 per child per month, and enrolls year-round. Brand names include NJ FamilyCare in New Jersey, AllKids in Illinois, HUSKY Health in Connecticut, and BadgerCare in Wisconsin. Screen your children for CHIP at healthcare.gov, because an HRA offer to a parent does not block the child's eligibility.
