Individual Coverage Health Reimbursement Arrangement (ICHRA) What Is an ICHRA?
An Individual Coverage Health Reimbursement Arrangement (ICHRA) is a flexible and tax advantaged group health plan that allows employers to reimburse employees a set cost for individual health insurance premiums. Unlike group health plans, under an ICHRA plan, employees are able to choose their own individual plans that best fit their needs while providing employers with predictable and manageable health care costs.
How it Works
Benefits for Employers
- Cost Control & Budget Predictability
Set a fixed monthly allowance per employee, eliminating surprise premium increases and giving you full control over your benefits budget. - ACA Compliance Made Simple
ICHRA can satisfy the Affordable Care Act’s employer mandate when structured correctly—without the complexity of traditional group plans. - Recruit & Retain Top Talent
Offer competitive, personalized benefits that attract high-quality candidates and increase employee satisfaction—without a one-size-fits-all group plan. - Tax Advantages
Employer reimbursements are tax-deductible and are not subject to payroll taxes, are generally not subject to income tax for qualifying employees, and employees may use pre-tax dollars to pay for premiums for qualifying plans maximizing tax savings on both sides. - Reduce Administrative Burden
No more managing renewals, plan comparisons, or carrier negotiations. With ICHRA, each employee selects the plan that fits their needs, and employers reimburse based on the chosen allowance.
Benefits for Employees
- Choice: Select individual health plans that best suit personal healthcare needs.
- Portability: Maintain health coverage even when changing jobs.
- Tax-Free Reimbursements: Receive reimbursements for premiums and qualified medical expenses without tax implications.
- Access to Additional Benefits: Include vision, dental, and other health-related expenses in reimbursement requests.
Is an ICHRA Right for Your Business?
An ICHRA can be an ideal solution for businesses seeking to offer flexible and cost-effective health benefits. It is particularly beneficial for companies with diverse workforces or those looking to provide benefits to employees who may not be eligible for traditional group health plans.
Get Started with ICHRA
Ready to implement an ICHRA for your business? Contact us to learn more about how ICHRAs can enhance your employee benefits package and streamline your healthcare offerings.
