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What Is an ICHRA?

Rather than choosing a single group plan for everyone, you fund a benefit and let each employee choose their own coverage. Here's the basic flow:

1
Employer Sets an Allowance

The employer sets a monthly reimbursement allowance that fits the business budget.

2
Employees Choose a Plan

Employees choose the individual health insurance plan that best fits their needs.

3
Submit & Get Reimbursed

Employees submit eligible expenses for reimbursement, up to their allowance — tax-free.

How Does It Work?

A simple arrangement that gives both sides a clear role.

For Employers

Decide how much to contribute each month
Set eligibility rules for different employee classes (if desired)
No minimum participation requirements
Better control over healthcare benefit costs
Reimbursements are generally tax-deductible for the business

For Employees

Purchase an eligible individual health insurance plan
Maintain qualifying individual health coverage
Submit eligible premiums or expenses for reimbursement
Receive tax-free reimbursements, subject to applicable rules

Benefits of ICHRA

A win-win structure that serves employers and employees alike.

For Employers

Predictable healthcare costs
Flexible benefit design
No annual group insurance renewal increases
Attractive employee benefit
Suitable for businesses of many sizes

For Employees

Freedom to choose their own health plan
Keep coverage when changing jobs (if the policy remains active)
More plan options than a single employer group plan
Potential access to a broader provider network

Who Can Benefit?

ICHRA can be a good fit for a wide range of employers.

Small businesses
Startups
Growing companies
Remote or multi-state workforces
Employers transitioning away from traditional group health
Businesses seeking more predictable benefit costs

Employer Flexibility

Employers may:

Set different reimbursement amounts for eligible employee classes, as allowed by regulations
Establish monthly reimbursement limits
Decide which qualified medical expenses will be reimbursed

Employee Choice

Employees can select:

Individual Marketplace health insurance
Off-Marketplace individual plans (if eligible)
Different deductibles and provider networks based on their healthcare needs

Things to Consider

Before implementing an ICHRA, plan ahead for a smooth rollout.

Determine an affordable reimbursement budget
Ensure employees understand how reimbursements work
Coordinate with a qualified benefits administrator or insurance professional
Consider how an ICHRA may affect an employee's eligibility for Marketplace Premium Tax Credits

Why Businesses Are Choosing ICHRA

Greater Budget Control

Predictable, defined contributions replace unpredictable group renewals.

Simplified Administration

Streamlined benefits administration compared to managing a group plan.

Flexibility & Choice

Employee flexibility and choice, with access to individual health insurance plans.

Access to Individual Plans

Employees tap into the individual market, often with more plan choices.

Scalable Solution

A scalable benefit that grows right alongside your business.

How We Can Help

We guide employers through every stage of an ICHRA:

Evaluate whether ICHRA is the right solution
Design an ICHRA strategy that fits your budget
Educate employees about their options
Assist employees in selecting individual health insurance plans
Provide ongoing support throughout the year

Disclaimer

ICHRA eligibility, reimbursement rules, and tax treatment are governed by federal regulations and IRS guidance. Employees offered an ICHRA may have different eligibility rules for Marketplace Premium Tax Credits depending on whether the ICHRA is considered affordable. Consult your tax or legal advisor for guidance specific to your business.

More Choice for Employees. More Control for You.

Offer your employees more choice while giving your business greater control over healthcare costs with an ICHRA solution.

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