Open Enrollment With an HRA: A 2027 Guide for Virginia Employers and Employees

“Your employer is giving you money to buy your own health insurance.”

That sounds straightforward—and in many ways, it can be. Employees get more say in choosing their coverage, while employers can set a budget for helping pay for it.

But when open enrollment arrives, a few details deserve attention. How much will the employer contribute next year? Does the employee need to choose a new policy? And what happens to the financial assistance their family already receives through the Marketplace?

Whether you’re considering an HRA for the first time or renewing an existing arrangement, this is the season to put those pieces together.

First, let’s untangle the names

An HRA, or health reimbursement arrangement, lets an employer reimburse eligible health expenses under a formal benefits plan. Depending on the arrangement, that can include employees’ insurance premiums and certain out-of-pocket expenses. The employer funds the benefit; employees follow the plan’s rules to receive reimbursements. Source: CMS’s HRA overview.

For employers helping workers purchase their own coverage, two arrangements come up most often:

Arrangement	What it means
CHOICE / ICHRA	An Individual Coverage HRA, available to employers of any size. Employees generally need qualifying individual health insurance or Medicare to participate.
QSEHRA	A Qualified Small Employer HRA, generally available to eligible employers with fewer than 50 full-time employees, including equivalents, that do not offer a group health plan. It has annual federal reimbursement limits.

CHOICE and ICHRA refer to the same underlying arrangement. Federal agencies introduced the CHOICE name in September 2026, so you may see both names in benefits materials. QSEHRA remains a separate option with different rules. Sources: CMS’s CHOICE announcement, HealthCare.gov’s employer guides.

The letters matter because they determine how your employer’s contribution works with Marketplace financial assistance.

There are two enrollment decisions—not just one

With an HRA, the employer sets up the reimbursement benefit, and the employee obtains the insurance policy.

Completing one does not automatically complete the other.

An employee may need to accept or decline the HRA through their employer’s process, then enroll in or renew qualifying health coverage separately. The HRA administrator may also require proof of coverage before reimbursements begin.

For Virginians buying individual coverage for 2027:

• Open enrollment begins November 1, 2026.
• Enroll by December 31, 2026, for coverage starting January 1, 2027.
• Open enrollment ends January 29, 2027.

An employer or HRA administrator may set an earlier deadline to allow time for processing. Follow both schedules. Sources: Virginia SCC’s enrollment guidance, HealthCare.gov’s HRA guidance.

Employees outside Virginia should check the deadlines in their own state.

Why January is often the best time to start an HRA

If you’ve been considering an HRA for your business, open enrollment is a natural time to put the plan in motion. A January 1 start lets employees choose their insurance while the individual market is open and begin the year with their coverage and employer reimbursement working together.

There’s a practical financial advantage, too: individual health insurance deductibles and out-of-pocket limits generally follow the calendar year.

Imagine an employee who has already paid toward their deductible when the business switches from group insurance to an HRA in July. If that employee needs a new individual policy, their previous spending generally won’t transfer. They could face a fresh deductible for the remaining months, followed by another reset in January.

Starting the new coverage on January 1 helps avoid that extra midyear restart. It also makes the employer’s allowance, annual insurance renewal, and employee budgeting easier to coordinate. Sources: HealthCare.gov’s guidance on choosing an HRA start date, its explanation of deductible and out-of-pocket transfers.

Starting an HRA does not itself reset an insurance deductible. The concern is changing the underlying insurance policy. If an employee can keep their existing qualifying individual plan, adding an HRA may not require a coverage change at all.

Employers should still review notice requirements and implementation timing before committing to a January launch.

For employers: review what your allowance actually buys

A fixed contribution makes benefits spending easier to budget. But employees still experience changes in insurance prices.

If an employee’s premium rises by $100 per month and the employer’s contribution stays the same, that employee generally has another $100 to cover—or a reason to shop for different coverage.

Before renewing an HRA, compare the proposed allowance with actual 2027 options where employees live. Consider whether employees can find suitable coverage, keep important doctors, and manage the remaining premium.

It also helps to compare the complete cost of your benefits approach: reimbursements, administration, employee support, and any alternative group-plan options.

An HRA can be a useful solution. Its value depends on the coverage employees can purchase and what they ultimately pay.

Don’t overlook the effect on existing subsidies

An employer contribution does not always improve an employee’s situation by the amount written on the offer letter.

An HRA offer can reduce or eliminate federal Marketplace premium tax credits. For someone receiving substantial financial assistance, the employer’s contribution could replace help they already had.

That is why employers should evaluate the effect on employees before announcing that everyone will save a particular amount. Employees can review household-specific information privately with an advisor or the Marketplace. Source: HealthCare.gov’s explanation of HRAs and Marketplace savings.

For employees: check how the offer affects your financial assistance

This is the most important distinction between CHOICE/ICHRA and QSEHRA.

With CHOICE / ICHRA, you generally choose one source of help

If the ICHRA offer meets the federal affordability standard, you generally cannot receive a federal premium tax credit—even if you decline the employer’s offer.

If it does not meet that standard, you may qualify for Marketplace tax credits, provided you meet the other requirements and formally opt out of the ICHRA.

You cannot accept ICHRA reimbursements and receive federal premium tax credits for the same person’s coverage for the same month. The offer can also affect family members offered coverage through the arrangement. Source: Virginia’s Insurance Marketplace HRA guidance.

Simply leaving the reimbursement money unused is not a substitute for checking eligibility and completing any required opt-out.

With QSEHRA, the two may work together—but the credit changes

An affordable QSEHRA generally makes an employee ineligible for federal premium tax credits.

If the QSEHRA is unaffordable, an otherwise eligible employee may receive both employer reimbursements and a reduced premium tax credit. The available QSEHRA benefit reduces the credit; employees cannot simply add the full employer allowance to their previous subsidy.

Tell the Marketplace about the QSEHRA and follow its instructions for adjusting advance credits. Source: HealthCare.gov’s QSEHRA coordination guidance.

Your family may still qualify for Marketplace savings

An employer’s HRA offer does not always produce the same answer for everyone in the household.

With a CHOICE arrangement, also called an ICHRA, an employer can offer reimbursement to the employee without extending the benefit to a spouse or children. In that situation, the employee may use the HRA while family members remain eligible for Marketplace premium tax credits, depending on household income and their access to other coverage. Sources: CMS’s explanation of optional family participation, federal guidance on whose subsidy eligibility an ICHRA offer affects.

For example, an employer might provide an employee-only ICHRA allowance. The employee uses that benefit for their coverage, while their spouse and children receive Marketplace savings for theirs—if otherwise eligible.

The key is who can receive reimbursement under the written arrangement, not simply whether the employer offers a larger allowance for families. An ICHRA that can reimburse family expenses may affect their subsidy eligibility even if the contribution stays the same.

QSEHRA works differently. An affordable QSEHRA can block federal premium tax credits for the employee and family members under its statutory rules. If it is unaffordable, tax credits may remain available, with the required reduction for the QSEHRA benefit. Don’t assume that describing the allowance as “employee-only” preserves family subsidies the way a genuinely employee-only ICHRA offer may. Source: IRS QSEHRA guidance.

Before enrolling, have the actual HRA notice reviewed alongside the household’s Marketplace application. That helps identify which family members can receive assistance and prevents the same premium expenses from being reimbursed twice.

What does “affordable” mean for 2027?

Here, “affordable” has a specific meaning under federal rules. It does not necessarily mean the policy feels inexpensive or covers everything your family wants.

For a calendar-year 2027 ICHRA, the calculation generally compares:

The employee’s lowest-cost, self-only Silver premium, minus the employer’s monthly allowance

with

10.22% of the employee’s monthly household income.

For example, suppose the relevant Silver premium is $650 and the employer contributes $300. The remaining amount is $350. For a household earning $60,000 annually, 10.22% of monthly income is $511. In this simplified example, the offer meets the affordability standard.

The employee does not have to buy that benchmark Silver plan. It is used for the calculation. Sources: HealthCare.gov’s CHOICE guidance, IRS’s 2027 affordability percentage.

QSEHRA uses a different benchmark: the second-lowest-cost self-only Silver plan. The calculations should not be used interchangeably. Source: Federal QSEHRA worksheet.

Employers may also use permitted affordability safe harbors for their own ACA responsibilities. Those calculations serve a different purpose from determining an employee’s eligibility for premium tax credits, which generally uses household income. Source: IRS employer guidance.

What about Virginia’s new Premium Savings program?

Virginia Premium Savings begins with 2027 coverage and targets eligible households earning between 138% and 250% of the federal poverty level.

However, employees should not assume that state assistance can simply be added to an HRA. Virginia’s eligibility rules include restrictions involving other coverage, and the published program FAQ does not resolve every HRA situation.

Disclose the employer offer when applying and ask the Marketplace to confirm eligibility before budgeting for both benefits. State savings require qualifying Marketplace enrollment; they are not available for a policy purchased directly from an insurer outside the Marketplace. Source: Virginia Premium Savings FAQ.

Choose the insurance around your care

Once you understand the employer contribution and any available savings, compare what the policies actually cover.

Check your doctors, hospitals, prescriptions, and expected treatment. Individual policies can have different networks from the employer group coverage you previously used—even when the insurance company’s name is familiar.

Then look beyond the monthly premium.

A plan with predictable copays for specialist appointments or therapy may be more cost effective than one that requires you to meet a large deductible and then pay coinsurance. Check whether those copays apply before the deductible, and whether tests or procedures are charged separately.

For someone expecting regular care, those details can outweigh a modest premium difference. Source: Virginia SCC’s health insurance shopping guidance.

Current Cigna individual medical customers also need replacement coverage for 2027 because Cigna is leaving that market. Check any automatically assigned replacement against both your medical needs and your HRA’s requirements. Sources: Cigna’s announcement, Marketplace renewal guidance.

Check how you’ll pay—and get reimbursed

Before enrollment ends, employees should know:

• What the HRA reimburses: premiums only, or other eligible expenses too.
• Whether family members are included.
• What proof of coverage and expenses is required.
• When reimbursements arrive and whether premiums must be paid first.
• How unused allowances and claim deadlines work under the plan.

There is also a purchasing detail worth checking with an ICHRA: if your employer offers a qualifying pretax payroll arrangement for the premium balance you pay yourself, that generally requires purchasing coverage outside the Marketplace. ICHRA reimbursements themselves can support qualifying coverage purchased on or off the Marketplace. Source: CMS’s employer guidance.

Ask before choosing the enrollment route.

Employers should check notice requirements now

Employee communication is part of setting up an HRA properly. Existing calendar-year arrangements generally have notice requirements well before January.

ICHRA notices are generally due at least 90 days before the plan year begins, with exceptions for certain newly eligible employees and newly established employers. QSEHRA also has an annual advance-notice requirement.

By late October, the usual 90-day deadline for a January 1 renewal has already passed. If you are starting or changing an arrangement now, have the administrator review the applicable timing rather than assuming open enrollment alone settles it. Sources: Department of Labor’s disclosure guide, IRS’s QSEHRA guidance.

New access to an HRA may also create a special enrollment opportunity outside the annual window. Confirm the eligibility, selection deadline, and coverage start date before ending existing insurance. Source: HealthCare.gov’s HRA decision guide.

Keep tax time in mind

If you receive federal premium tax credits in advance, they are reconciled when you file the federal tax return for that coverage year. For 2027 coverage, that generally means filing your 2027 return in 2028.

An unreported HRA offer or an incorrect subsidy adjustment can leave you with excess credits to repay. Beginning with tax year 2026, the former income-based repayment caps no longer apply.

Keep your HRA notice, report changes promptly, and give your tax preparer the relevant benefits information. Source: IRS premium tax credit guidance.

Make this enrollment season easier

A successful HRA renewal brings together three things: a clear employer contribution, insurance that fits the employee, and an accurate understanding of financial assistance.

Reach out to Akins Advisory Partners if you need help evaluating your options during this open enrollment period. Whether you’re an employer considering CHOICE/ICHRA or QSEHRA, or an employee deciding how to use an existing benefit, we can help you work through the choices and understand what they mean for your budget and coverage.