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The Dangers of ICHRAs

Tuesday, June 20, 2023


Tomorrow, the U.S. House of Representatives is scheduled to vote on a bill that would codify the harmful Trump-era ICHRA policy, which could permanently allow health discrimination in the workplace. Keep US Covered (KUC) and its campaign partners, who are committed to protecting and expanding quality health coverage and improving care for working Americans, believe that the pending legislation represents a serious threat to both quality coverage for working people and the Affordable Care Act (ACA).


ICHRAs weaken the quality and reliability of health coverage, open the door to discrimination in the workplace, and undermine the affordability of the ACA marketplaces. This flawed system for health coverage originated from an executive order signed by former President Donald Trump in 2017, resulting in a new regulation finalized in 2019 that created what are now known as ICHRAs as a replacement for traditional employer-sponsored insurance.


For employers participating in this ICHRA system, employees no longer receive coverage provided by their employer. Instead, workers in ICHRAs receive a stipend and are left to find coverage on their own. If the stipend does not cover the cost of coverage for the employee and their family, the worker must pay the difference out of pocket.


Even more concerning, this regulation allows workers to be divided by “class” so that some “classes” continue to receive their regular health coverage from employers while others are given an ICHRA and are forced to find their own coverage. This undermines the promise of the ACA, which “prohibits discrimination on the basis of race, color, national origin, sex, age, or disability.”


For struggling families, vulnerable populations, and those with pre-existing conditions, ICHRAs represent a harmful precedent and could result in a higher number of underinsured people, weaker coverage, and a systematic shift in terms of who is covered – moving those who are more expensive into government risk pools and off of private insurance.


Although President Biden has recognized the threat posed by ICHRAs in one of his first acts as president, the policy remains in place today. KUC and its campaign partners continue to urge President Biden to quickly follow through on his effort to review and do away with ICHRA and junk insurance rules in Executive Order 14009.


NOW is the time to push back. With the House of Representatives set to pass this legislation tomorrow, quality health coverage for millions of hardworking Americans is on the line. Keep US Covered is urging members of Congress to reject this bill and instead to focus on repealing the rule through administrative action.


For more information on KUC and its partners’ work to educate policymakers on ICHRAs, STLDI, and the social determinants of health, visit or follow the campaign on Twitter and Facebook.

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