Individual Coverage Health Reimbursement Arrangement (ICHRA)
Learn how an Individual Coverage Health Reimbursement Arrangement (ICHRA) allows employers to reimburse employees for individual health insurance premiums and qualified medical expenses while offering greater flexibility and cost control.
What Is an ICHRA?
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An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded health benefit that reimburses employees for eligible individual health insurance premiums and qualified medical expenses. Instead of offering one group health plan to everyone, employers provide a monthly allowance that employees can use toward qualifying healthcare costs.
This approach gives businesses greater control over healthcare spending while allowing employees the flexibility to choose an individual health insurance plan that fits their doctors, prescriptions, and personal healthcare needs.
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Key Benefits of an ICHRA
An ICHRA gives employers more flexibility while empowering employees to select health coverage that works best for them.
Predictable Healthcare Costs
Employers determine their reimbursement budget, making it easier to control healthcare expenses from year to year.
Greater Employee Choice
Employees can choose the individual health insurance plan that best matches their healthcare providers, prescriptions, and budget.
Easy to Scale as Your Business Grows
An ICHRA can adapt as your workforce changes, making it a flexible option for growing businesses.
Startup Company
A technology startup with 10 employees chooses an ICHRA instead of a traditional group health plan, allowing each employee to purchase individual coverage while the company controls healthcare costs.
Remote Workforce
A business with employees in multiple states uses an ICHRA so each employee can select a health plan available in their local market.
Growing Small Business
A family-owned business switches to an ICHRA to provide health benefits without the administrative complexity of managing a traditional group insurance plan.
Before Offering an ICHRA
What You Need to Know
Understanding how an ICHRA works can help you decide whether it’s the right employee health benefit for your business.
To receive tax-free reimbursements, employees generally must be enrolled in qualifying individual health insurance coverage.
Businesses decide how much they want to reimburse eligible employees each month, giving them greater budget flexibility.
ICHRAs must meet applicable federal regulations, including employee eligibility and reimbursement requirements.
Helping Businesses Modernize Employee Benefits
We help employers evaluate ICHRA solutions, compare benefit strategies, and implement flexible healthcare options that support both their employees and business goals.