An Individual Coverage Health Reimbursement Arrangement (ICHRA) is the newest standalone HRA that enables employers of all sizes to reimburse employees, tax-free, for individual health insurance premiums and potentially other qualifying medical expenses. Here's a handy guide to see if ICHRA is a good fit for your client.
ICHRAs are quickly becoming one of the fastest-growing forms of employee benefits in the U.S., so many employers want to know if ICHRA is a good fit for their company. It’s time to start discussing ICHRAs with your clients; we can help!
Take Command helps your clients and their employees find, purchase, and manage affordable alternatives to small group insurance on the individual health insurance marketplace.
Our end-to-end platform simplifies and streamlines the entire process. Your client is supported by world-class industry experts every step of the way.
Is your client a good fit for a Take Command ICHRA?
ICHRA is a great fit for the modern, mixed workforce because it allows your client to provide health coverage for various employee types (classes), such as part-time and seasonal workers and remote workers. If your client has a mixed workforce or is in one of the following industries, they could be a good fit for ICHRA.
If your client has the following workers, they could be a great fit for ICHRA.
- Full-time employees
- Part-time employees
- Seasonal employees
- Employees covered under a collective bargaining agreement
- Employees in a waiting period
- Foreign employees who work abroad
- Employees working in the same geographic location (same insurance rating area, state, or multi-state region)
- Salaried workers
- Non-Salaried workers (such as hourly workers)
- Temporary employees of staffing firms
- A combination of two or more of the above
NOTE: Each class can be divided further by age and the number of dependents.
Industries with high turnover, short employee tenure, populations of lower-paid workers, or a mix of hourly and salary employees tend to be a good fit for an ICHRA plan.
- Health care
- Professional services
ICHRA Compatibility Chart
|A good fit for HRAs||Not a good fit for HRAs|
|First time to offer health benefits||Employees qualify for large premium tax credits|
|Want more flexibility, simplicity, customization||Employer offers a group plan that all employees love at the right price|
|Did not qualify for group coverage||Single member S-Corp|
|Need to control budget|
|Looking for tax-friendly benefits|
|Don't want to manage risk of group plan|
|Currently increasing salaries or offering health stipends|
|Participation concerns or trouble insuring remote or part time workers|
Explaining ICHRA Benefits To Your Client
When you want to transition your client to a new benefits model, it’s important to highlight the benefits for them and their employees. Here are some key talking points you can use.
- Your client can get out of the health insurance risk management game.
- HRAs are competitive employee benefits offerings.
- There are no participation requirements.
- There are no annual premium raises with an HRA.
- HRAs reduce small business health insurance costs.
- Employees can choose the health insurance plan that works best for them.
- Employees get tax-free reimbursements for health insurance premiums and other medical expenses.
- Health insurance is portable since the employee has their own individual plan.
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Susanne is a copywriter specializing in the health and wellness industry. Before starting her own business, she spent nearly a decade at a marketing agency doing all of the things – advisor, copywriter, SEO strategist, social media specialist, and project manager. That experience gives her a unique understanding of how the consumer-focused content she writes flows into each marketing piece. Susanne lives in Oklahoma City with her husband and two daughters. She loves being outdoors, exercising and reading.