A defined budget. More individual choice.

How does an ICHRA work?

An ICHRA lets an eligible employer reimburse employees for qualifying individual health coverage and eligible expenses under the arrangement’s rules. The employer sets the allowance; employees choose qualifying individual coverage. Eligibility, substantiation and plan design requirements apply.

Understand the allowance budget

Multiply the monthly allowance by the number of eligible employees to estimate a maximum monthly allowance budget. Multiply by 12 for a full-year illustration. Actual reimbursements depend on eligible expenses and participation; administration fees are additional.

Review affordability and employee needs

An ICHRA offer can affect an employee’s eligibility for Marketplace premium tax credits. Affordability, employee classes, notices and enrollment timing need careful review. Do not assume every employee can combine the allowance with Marketplace financial assistance.

Compare before deciding

Consider employee locations, individual plan availability, provider networks, administration and your contribution goals. Benefits Direct can help you compare this approach with a group plan before choosing an arrangement.

Common questions

Is the online ICHRA calculator an insurance quote?

No. It illustrates an allowance budget using the employee count and monthly allowance you enter. It does not price insurance or determine eligibility, affordability or tax treatment.

Is ICHRA the right fit for every employer?

No. The fit depends on the workforce, available individual coverage, affordability and plan rules. Review your circumstances with qualified insurance, tax and legal advisers as appropriate.