Employer ICHRA

Getting Started

Providing quality health benefits is one of the best ways to attract and retain employees—but traditional group health insurance isn't the right fit for every business. An Individual Coverage Health Reimbursement Arrangement (ICHRA) gives employers a flexible, cost-effective alternative

ICHRA

What Is an ICHRA?

An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded health benefit that reimburses employees for eligible health insurance premiums and qualified medical expenses.

Instead of purchasing one group health plan for everyone, employers provide a defined monthly allowance. Employees purchase their own qualifying individual health insurance and are reimbursed up to the amount you choose to provide.

This allows businesses to control healthcare costs while giving employees the freedom to select the coverage that works best for themselves and their families.

Employers

Benefits for Employers

An ICHRA offers several advantages for businesses of all sizes:

Predictable healthcare costs with employer-defined reimbursement amounts
No requirement to purchase a traditional group health plan
Flexible benefit design based on employee classes
Potential tax advantages for employers and employees
Simplified budgeting and long-term cost control
Helps attract and retain quality employees
Scalable for growing businesses
Available to businesses of many sizes, including those with employees in multiple states

Employees

Benefits for Employees

Employees gain greater control over their healthcare by choosing the coverage that best meets their individual needs.

Advantages include:

Freedom to select their own health insurance plan
Access to a broader range of plan options
Coverage that can better fit their doctors, prescriptions, and healthcare preferences
Health insurance that may continue with them if they change employers (subject to plan rules)
Reimbursements for eligible health insurance premiums and qualified medical expenses

Is ICHRA Right?

Is an ICHRA Right for Your Business?

An ICHRA may be a great solution if your business:

Is looking for an alternative to traditional group health insurance
Wants more predictable healthcare costs
Has employees in multiple locations or states
Wants to offer competitive employee benefits
Is growing and needs a flexible benefits strategy
Wants to customize reimbursement amounts for different eligible employee classes, as allowed by federal regulations

We’ll help you determine whether an ICHRA is the right fit for your business and explain how it compares to traditional group health insurance.

How it Works

How an ICHRA Works

Step 1: Set Your Budget

Your business determines how much you want to contribute toward employee healthcare expenses.

Step 2: Employees Choose Their Coverage

Eligible employees enroll in qualifying individual health insurance that meets their healthcare needs.

Step 3: Submit Eligible Expenses

Employees submit eligible premium or medical expense documentation for reimbursement.

Step 4: Receive Tax-Advantaged Reimbursements

Approved expenses are reimbursed up to the employer’s monthly allowance, following applicable IRS rules.