ICHRA Permanency Act Locks In 2019 Health Reimbursement Rules, Stabilizing Employer Health Plans

The “ICHRA Permanency Act” is a piece of legislation that sounds like pure bureaucratic boilerplate, but it has a real impact on how employers offer health coverage. Simply put, this bill takes an administrative rule that was put in place back in 2019 regarding Individual Coverage Health Reimbursement Arrangements (ICHRAs) and makes it permanent federal law. It codifies the final rule published by the Secretaries of Treasury, Labor, and Health and Human Services, giving it the full force and effect of law (SEC. 2).

What’s an ICHRA, and Why Does This Matter?

Think of an ICHRA as a way for your employer to give you tax-free money to buy your own individual health insurance plan, instead of offering a traditional one-size-fits-all group plan. The 2019 rule established the framework for how companies—especially smaller ones—could do this. Before this rule, it was much harder for employers to offer these arrangements without running afoul of existing healthcare laws.

This bill doesn't introduce a new benefit or change the rules of the road immediately. Instead, it’s about regulatory stability. Because the ICHRA framework was established through an administrative rule, it could potentially be changed or even revoked by a future administration. By passing the ICHRA Permanency Act, Congress is essentially putting that rule in concrete. This means employers who have adopted ICHRAs—or are thinking about it—can be confident that the ground won't shift beneath them next year.

The Real-World Impact: Certainty for Employers and Employees

For a small business owner who finally figured out how to use ICHRAs to manage rising insurance costs, this bill is a huge sigh of relief. It locks in the certainty that their current benefits strategy is legally sound for the long haul. For an employee, this means the individual coverage option they chose through their employer’s ICHRA is less likely to suddenly disappear due to a regulatory change in Washington. It’s a move that favors stability and predictability in the employer-sponsored health market.

However, locking in a specific rule has a flip side. While stability is good, it also means that if there are minor technical issues or needed updates to the 2019 rule, they can’t be fixed easily by the agencies that wrote them. Any future modifications would require Congress to pass a new law. This rigid codification (SEC. 2) removes the flexibility that administrative agencies normally have to fine-tune regulations as the market evolves, potentially slowing down necessary improvements down the line.