Committee Hears Support for Tax Credit to Help Small Employers Offer ICRA Health Benefits

The House Ways and Means Committee took proponent testimony on House Bill 133, a measure to create a nonrefundable tax credit for small employers that offer individual coverage health reimbursement arrangements, or ICRAs.

Kathy (Kathy) Grayson, representing Oscar Health, described ICRAs as a defined-contribution approach that lets employers provide set amounts for employees to buy individual-market coverage. "By putting in place a tax credit, for employers that offer this product, this body would be creating the opportunity for this product to be discussed more widely," Grayson said. She told the committee Oscar serves almost 2 million members nationwide, with about 90,000 members in Ohio.

Witnesses from small-business and broker groups expanded on the concept. Cameron Garsick of the National Federation of Independent Business (NFIB) said House Bill 133 would create a nonrefundable tax credit for businesses with 2 to 50 employees that contribute at least $400 per covered employee. "Most small businesses want to provide health insurance to their employees," Garsick said, and cost is the primary barrier. He and other witnesses noted the small-group employer market has contracted and premiums have risen sharply, making ICRAs an attractive alternative for some employers.

Marshall Darr, CEO and cofounder of Stretch Dollar, and Frank Spinelli of EZICRA described employer and employee use cases. Darr gave a client example in which an employee with multiple medical needs could be matched with an individual plan that fit her care needs better than a standard small-group option. Spinelli said his platform moved multiple employer groups from small-group plans to ICRAs and that, in some cases, employer and employee costs were stable compared with historic group increases.

Committee members asked about program details: Representative Hall asked about expansion phases and the bill’s employer-size definition; witnesses said the bill targets employers with 2 to 50 employees and that the $400 figure follows models used by other states. Representative Troy asked whether the proposal could reduce Medicaid enrollment among adults who receive employer coverage; Kathy Grayson and other witnesses said increasing employer coverage could reduce the uninsured rate and provide an alternative to Medicaid for some workers.

Committee staff recorded multiple written submissions in support. The committee concluded the second hearing for House Bill 133; no formal committee vote was recorded.