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Individual Coverage Health Reimbursement Arrangement

Save & streamline with our ICHRA administration

Reimburse your employees tax-free with an individual coverage health reimbursement arrangement from the industry’s only individual coverage health reimbursement arrangement (ICHRA) platform with hands-on enrollment support.

  • Manage benefits for an hour or less per month
  • No more surprises, renewals, or participation rate concerns
  • A smart, hands-off alternative to group health insurance
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Individual Coverage Health Reimbursement Arrangements

Take Command makes ICHRA administration simple and easy.

Flexible Designs

No more one-size fits all plans! ICHRA plans can be customized and designed to achieve you or your clients’ goals. 

Simple Administration

Take Command will automatically generate the documents your employees need and can help them search for and enroll in a plan online.

No Contribution Limits

There are no annual contribution caps. This allows employers to define unrestricted benefit budgets.

Learn More

Want to dive into the details of the individual coverage HRA? 

Our ICHRA Guide will walk you through how ICHRAs work, ICHRA benefits, and ICHRA setup. 

industry's best Individual Coverage Health Reimbursement Arrangement

Join the 5,000+ businesses saving on health benefits with Take Command

Union Orthotics and Prosthetics

"Facing a 40% renewal, our broker introduced us to the idea. Take Command provides the tools there for everybody to enroll in very easy formats on the platform."

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Taro Health

"To attract and maintain talent, we needed benefits. Managing our ICHRA has been simple and hands-off. I spend two hours a month managing and administering it."

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"Take Command has made it simple to set up and administer the small business HRA for StreamCare and we highly recommend it to other small businesses."

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Individual Coverage Health Reimbursement Arrangements

An Individual Coverage Health Reimbursement Arrangements (ICHRA) is a type of Health Reimbursement Arrangement (HRA) that allows employers to reimburse employees for their individual health insurance premiums and qualified medical expenses. Here’s your in-depth guide to ICHRAs, including rules, benefits, and how they compare to other health coverage options.

What is an HRA?

Before we dive into ICHRAs, let's take a step back and define what an HRA is. An HRA is an employer-funded, tax-advantaged health benefit plan that reimburses employees for certain medical expenses. The employer sets aside a specified amount of money for each employee, and the employee can use that money to pay for eligible medical expenses. HRAs are typically used with a high-deductible health plan (HDHP).


While both are tax-advantaged accounts that can be used to pay for qualified medical expenses, there are some key differences. An HSA can only be used with an HDHP, and the funds in the account roll over from year to year. Additionally, the employee owns the funds in an HSA and can take them with them if they leave their job. On the other hand, the employer owns the funds in an HRA, and any unused funds at the end of the year typically revert back to the employer. Check out this blog for more information. 


Unlike an HRA or HSA, a PPO is a type of health insurance plan that typically requires members to pay a copay or coinsurance for medical services. PPOs also often have a network of preferred providers that members can choose from, and seeing out-of-network providers can result in higher out-of-pocket costs.

What happens to unused HRA funds?

Any unused HRA funds at the end of the plan year typically revert back to the employer. However, some employers may choose to roll over unused funds to the next plan year or offer a grace period for employees to use up their remaining funds. Get more information here. 

ICHRA for dummies

Now that we have covered the basics of HRAs, let's dive into ICHRAs specifically. An ICHRA is a type of HRA that allows employers to reimburse employees for their health insurance premiums and qualified medical expenses. With an ICHRA, the employer sets a monthly allowance for each employee, which the employee can use to purchase individual health insurance coverage or pay for eligible medical expenses. ICHRA for dummies 101. 

Best ICHRA administrators

An ICHRA administrator is a person or entity responsible for administering and managing the plan on behalf of an employer. Their role is to ensure compliance with all applicable laws and regulations, manage employee enrollment and eligibility, process claims and reimbursements, and provide support to both the employer and employees with any questions or concerns they may have.

ICHRA administration cost

The cost of ICHRA administration can vary depending on the administrator and the size of the company. However, the cost is typically less than the cost of a traditional group health insurance plan. Since the employer is only paying for the allowance and not the entire premium, the overall cost of an ICHRA can be much more manageable for small businesses.

ICHRA plan document

To establish an ICHRA, a written plan document must be created that outlines the terms and conditions of the plan. The plan document must include information such as the eligibility requirements for employees, the monthly allowance amount, the types of expenses that are eligible for reimbursement, and any other plan rules or restrictions.

Will ICHRA help you save on benefits? 

In about half the country, individual insurance rates are cheaper than their group plan equivalents, meaning health benefits dollars will stretch further with ICHRA. Use our heat map to see if your location is prime for saving.

ICHRA pros and cons

ICHRA plans come with their own set of pros and cons that businesses should consider before implementation:


  • Cost control: Employers can set a fixed, tax-free monthly allowance for employees, helping to manage and predict healthcare expenses.
  • Flexibility: Employees have the freedom to choose individual health insurance policies that best suit their needs and preferences.
  • Simplified administration: ICHRA providers like Take Command streamline the setup and management process, reducing administrative burdens on businesses.
  • Tax benefits: Both employers and employees can enjoy tax advantages associated with ICHRA plans.
  • Scalable: ICHRAs are suitable for businesses of any size and can grow as the company expands.


  • Limited group plan options: ICHRA implementation means employees cannot participate in a traditional group health insurance plan.
  • Risk of inadequate coverage: Employees may choose plans with lower premiums, potentially resulting in insufficient coverage for their healthcare needs.
  • Complex regulations: Businesses must navigate and comply with ICHRA-related regulations, such as ensuring employees' purchased plans meet the minimum essential coverage requirements.
  • Employee education: The process of selecting and managing individual health insurance policies may be confusing or overwhelming for some employees - be sure to partner with an ICHRA administrator that has in-house, hands-on enrollment support (like Take Command!).

Check out this blog for more information. 

ICHRA provider

An ICHRA provider, like Take Command, is a company that helps other businesses manage healthcare benefits for their employees through something called an ICHRA plan. The employer gives their workers a certain amount of tax-free money each month to buy their own health insurance on the open market. When a business teams up with Take Command, they make setting up this ICHRA thing a piece of cake, taking care of all the legal stuff and making sure employees have an easy time picking and managing their policies. This way, the company can keep their healthcare expenses in check and employees can choose the plan that works best for them. All about ICHRA providers. 

ICHRA rules

  • There are several rules that employers must follow when establishing and administering an ICHRA. Some of the key rules include:
  • Eligibility: Employers must offer the ICHRA to all employees who meet certain eligibility requirements, such as working a minimum number of hours per week.
  • Allowance amount: Employers must set a monthly allowance amount for each employee that is fair and reasonable.
  • Reimbursement: Employees must submit documentation of their eligible expenses in order to be reimbursed from the ICHRA.
  • Discrimination: Employers cannot discriminate in favor of highly compensated employees when offering an ICHRA.

ICHRA vs group plan

One of the main differences between an ICHRA and a traditional group health insurance plan is that with an ICHRA, employees can choose their health insurance plan. This can be an advantage for employees who prefer more flexibility and control over their healthcare.

However, it can also mean that employees may have fewer options for healthcare providers and services than they would with a traditional group plan. Check out this blog for more information. 


ICHRA and QSEHRA are two distinct healthcare reimbursement arrangements that offer unique features and benefits to employers and employees, each catering to different business needs and structures. Check out this blog for more information. 

Here's a comparison chart to help illustrate the key differences between ICHRA and QSEHRA:




Eligible Employers

All employers, regardless of size

Small employers with 50 or fewer employees

Employer Requirement

Cannot offer a group health plan to ICHRA-eligible employees

Cannot offer any group health plan to employees

Allowance Variation

Can vary based on job classification, family size, and geographic location

Can only vary based on family size

Employee Coverage

Must purchase individual health insurance

Can cover individual, group, or Medicare policies

Maximum Annual Allowance

No limit set by the government

Limits set by the government each year

Minimum Essential Coverage

Must meet minimum essential coverage requirements

No specific minimum essential coverage requirement

Employee Tax Credits

Employees may lose premium tax credits

Employees can still access premium tax credits

Reporting and Compliance

More complex reporting and compliance requirements

Simpler reporting and compliance requirements


How to set up an ICHRA

  • To set up an ICHRA, employers must follow several steps, including:
  • Determine eligibility requirements for employees.
  • Set a monthly allowance amount for each employee.
  • Establish a written plan document outlining the plan's terms and conditions.
  • Choose an ICHRA administrator.
  • Communicate the plan to employees and provide them with guidance on how to use the ICHRA.

Health reimbursement arrangement rules

In addition to the specific rules governing ICHRAs, general rules apply to all HRAs. Some of the key rules include:

  • Eligibility: HRAs must be offered to all eligible employees on a nondiscriminatory basis.
  • Reimbursement: Employees must submit documentation of their eligible expenses to be reimbursed from the HRA.
  • Annual limits: HRAs must have an annual limit on the amount of reimbursements that can be made to employees.
  • Portability: HRAs are not portable, meaning that any unused funds in the account revert to the employer if the employee leaves their job.

IRS rules for health insurance reimbursement

It's important to note that the IRS has specific rules governing employer reimbursement for health insurance premiums. Before the creation of ICHRAs, employers were prohibited from reimbursing employees for their health insurance premiums. However, the creation of ICHRAs allows employers to provide this type of reimbursement in a tax-advantaged way.

Health insurance reimbursement taxable IRS

It's also important to note that any reimbursements made through an HRA, including ICHRAs, are tax-free for employees. However, any unused funds in an HRA at the end of the plan year typically revert back to the employer and are considered taxable income.

Health reimbursement account eligible expenses

Eligible expenses for an HRA, including an ICHRA, include a wide range of medical expenses that are not covered by insurance. These expenses may include:

  • Deductibles, copayments, and coinsurance
  • Prescription drugs
  • Vision and dental expenses
  • Mental health services
  • Chiropractic services
  • Acupuncture
  • Medical equipment and supplies
  • Home healthcare
  • HRA eligible expenses 2023

Eligible expenses for an HRA are subject to change each year. As of 2021, the eligible expenses for QSEHRAs and ICHRAs are the same. However, the eligible expenses may change in the future.

HRA eligible expenses over the counter

It's important to note that as of January 1, 2020, HRAs can be used to reimburse the cost of over-the-counter (OTC) medications without a prescription. This change was made as part of the CARES Act.

The complete ICHRA eligible expenses list. 


Ready to Get Started?

Begin designing your ICHRA plan today and be set up in minutes. You could start reimbursing your employees tax-free sooner than you think. 

Ready to get started?

Begin designing your ICHRA plan today and be set up in minutes. You could start reimbursing your employees tax-free sooner than you think.


One of the best things about ICHRA is that employers can customize the plan to fit their workforce's specific needs. Unlike traditional group health plans, ICHRA lets employers set their own contribution amounts and eligibility criteria. This means that employers can offer health benefits to their employees while saving money on administration costs.

So, what kinds of health care expenses can be reimbursed through ICHRA? Well, any expenses that are approved by the IRS can be reimbursed, including premiums for individual health insurance, deductibles, copayments, and prescription drugs. Employers can even choose to set limits on the amount they will reimburse for each expense category, or offer a flat dollar amount that employees can use for any eligible expense.

To set up an ICHRA plan, employers need to create a plan document that outlines the rules and regulations of the plan. The plan document should include information about eligibility criteria, reimbursement rates, and other important details. Once the plan document is created, employers can begin offering the plan to their employees.

When it comes to choosing between ICHRA and other health benefit plans, employers may want to consider the pros and cons of each. One of the pros of ICHRA is that it's flexible and cost-effective, while some employees may prefer the stability of a group plan. Employers may also want to consider the differences between ICHRA and QSEHRA.

Health Reimbursement Arrangement Rules

HRAs are a popular way for employers to provide health benefits to their employees. These plans allow employers to reimburse employees for their health care expenses, including premiums for individual health insurance coverage. However, there are specific rules that employers need to follow in order to stay in compliance with the IRS.

One of the most important rules is that employers can only reimburse employees for health insurance premiums if they offer the plan on a pre-tax basis. This means that the employer must have a Section 125 cafeteria plan in place. Additionally, the employer must offer the same terms to all employees who are eligible for the plan.

Another important HRA rule for employers is that they must ensure that their plan complies with the IRS guidelines. The IRS has specific guidelines for HRAs that include rules regarding eligibility criteria, maximum annual reimbursement amounts, and other important details. Employers must make sure that their plan complies with these guidelines in order to avoid penalties.

Employers should also keep in mind that they are responsible for administering their HRA plan in compliance with the rules. This means that they must keep accurate records of employee reimbursements, and they must make sure that the plan is being administered fairly and consistently for all eligible employees.

Take our HRA quiz to see which HRA is right for you!

Understanding Health Reimbursement Account Eligible Expenses

Eligible expenses for an HRA are those expenses that are considered "qualified medical expenses" under the IRS guidelines. These expenses include deductibles, copayments, coinsurance, and other out-of-pocket costs that employees incur when receiving medical care. They also include expenses for prescription drugs, medical equipment, and other health care-related expenses.

In 2023, there will be some changes to the list of eligible expenses for HRAs. For example, certain over-the-counter (OTC) items that were previously not eligible for reimbursement will now be eligible, including items such as pain relievers, allergy medication, and cold and flu remedies. 

It's important for employees to understand what expenses are eligible for reimbursement under their HRA plan. By understanding these eligible expenses, employees can make the most of their HRA benefit and ensure that they are getting the most value from their employer's health care plan.

Take Command is in your corner

We understand that choosing the right healthcare benefits for your employees is a critical decision. ICHRAs offer a unique solution with both advantages and challenges. We're here to help you navigate this process and make it as smooth as possible.

With our ICHRA plans, you can better control costs, offer employees greater flexibility, and simplify administration. Plus, our solutions cater to businesses of all sizes, providing valuable tax benefits for you and your employees. However, we're aware that implementing ICHRA plans comes with potential downsides, such as employees missing out on group plans or opting for inadequate coverage.

Our team is committed to guiding your business through complex regulations, ensuring compliance and minimizing confusion for your employees. While the cost of individual plans may fluctuate, we work diligently to help your employees make informed choices about their health insurance policies.

At Take Command, we strive to balance the professional and conversational approach to offer you the best ICHRA experience. We're dedicated to helping you and your employees reap the benefits of ICHRAs while addressing any concerns or challenges that may arise. Together, we can create a healthcare benefits solution that's tailored to your company's needs.


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