A $0 Health plan to Implement Today. That's It!

Executive Summary

Healthcare costs continue to rise, pushing employers to find innovative ways to lower premiums while maintaining quality coverage. One effective solution for dual-income households is the Spousal Incentive Health Reimbursement Arrangement (SIHRA). SIHRA encourages employees with working spouses to use their spouse’s employer-sponsored insurance, while reimbursing eligible out-of-pocket expenses. This newsletter explains how SIHRA works, its advantages and challenges, and how Catalize Health helps simplify its administration. A brief discussion today with Jackson Maniscalco at Catalize Health really opened our teams eyes with their product NetZero Health Plan. Lets get into it!

What Is a SIHRA?

A SIHRA (Spousal Incentive Health Reimbursement Arrangement) is an employer-funded account that reimburses employees for eligible medical expenses when they choose to enroll their spouse in the spouse’s employer health plan instead of using their own company plan. The reimbursements cover costs like deductibles, copayments, and coinsurance.

Why SIHRA Works Well for Dual-Income Households

Dual-income families often have multiple insurance options. SIHRA encourages the spouse to enroll with the better, often more cost-effective plan, reducing the overall claims risk for an employer while helping employees manage healthcare costs. Employers benefit from lower premiums and fewer claims on their main plan, while employees receive reimbursements that ease their expenses.

Benefits of SIHRA Plans

• Cost savings for employers: Fewer dependents on employer plans reduces claims and premiums.

• Helps employees: Covers out-of-pocket expenses on the spouse’s plan.

• Positive incentives: Encourages choice without penalties or surcharges.

• Regulatory compliance: Aligns with IRS, ACA, ERISA, and HIPAA requirements.

• Tax advantages: Reimbursements are generally tax-free to employees.

Considerations and Challenges

• Administration complexity: Requires expense tracking and verification.

• Dependent on spouse’s coverage: Only beneficial if the spouse has a good employer plan.

• Need for clear education: Employees must understand the option and process.

• Supplemental benefit: Does not replace primary health insurance, only reimburses.

How Catalize Utilizes Their NetZero Health Plan for Companies Like Yours

Catalize Health’s NetZero Health Plan is a simple, practical option for employees who have working spouses with their own insurance. Here’s how it works: if you switch over to your spouse’s health plan, your employer will reimburse you for out-of-pocket costs like deductibles and copays. That way, your family doesn’t get stuck with big medical bills.

NetZero sits alongside any insurance you already offer—no need to change your brokers or existing carriers. Catalize Health takes care of the setup and day-to-day details. For the employer, it means fewer people covered under their main health plan, which helps lower costs and keep premiums down.

This is a straightforward solution for dual-income families looking to get the most out of their health benefits. It’s about making coverage smarter and more affordable, without adding any headaches or red tape for employees or HR.

Final Thoughts

SIHRAs are a smart way for employers to reduce healthcare costs by encouraging employees with working spouses to use their spouse’s insurance. In return, the employee gets reimbursed for out-of-pocket costs like deductibles and copays, which keeps coverage affordable. This setup lowers claims and premiums for the employer while giving employees more flexibility without spousal penalties. It’s easy to add without changing brokers or current insurance plans. Catalize Health’s NetZero Health Plan makes it even simpler by handling the setup, compliance, and day-to-day management. When paired with a SIHRA, NetZero helps families pay close to nothing for care—and helps employers control healthcare costs without the usual frustration. Thank you for reading up to this point, if you have any questions or want to chat, always feel free to reach out!

About the Author

William Barnhart is a Employee Benefit Consultant for Stumm Insurance and a graduate from Iowa State University. In his role, William focuses primarily on the continued development of Stumm Insurance, expanding their current partnerships and enhancing the employee benefits value proposition through unparalleled benefits resources and advanced strategy implementation.

With multiple years of industry experience, William previously worked in the Medicare field helping Medicare and Medicaid recipients receive the plan that fits their needs, and bring crucial care to those who need it the most.

References

Here is a list of references for the SIHRA and Catalize Health information provided above:

1. EisnerAmper. “Spousal Incentive Health Reimbursement Arrangement.” EisnerAmper.com, June 10, 2024. https://www.eisneramper.com/insights/employee-benefit-plan/spousal-incentive-health-reimbursement-arrangement-0624/

2. Sullivan Benefits. “Spousal Incentive HRAs.” PDF document, August 2024. https://www.sullivan-benefits.com/wp-content/uploads/2024/08/Spousal-Incentive-HRAs.pdf

3. Newfront. “Ten Spousal Incentive HRA Compliance Considerations.” Newfront.com, June 20, 2024. https://www.newfront.com/blog/ten-spousal-incentive-hra-compliance-considerations

4. NFP. “FAQ: What is a spousal incentive HRA?” NFP.com, October 9, 2024. https://www.nfp.com/insights/faq-what-is-a-spousal-incentive-hra/

5. TriFortA. “Spousal Incentive HRAs: An Employer's Guide to Healthcare Savings.” TriFortA.com, December 3, 2024. https://www.triforta.com/spousal-incentive-hras

6. Willis Towers Watson. “What should be considered before offering a spousal incentive HRA?” WTWco.com, February 20, 2024. https://www.wtwco.com/en-us/insights/2024/02/since-you-asked-what-should-be-considered-before-offering-a-spousal-incentive-hra