Toggle navigation

What is ICHRA?

Learn about Individual Coverage HRAs

The Individual Coverage HRA was announced in 2019 and allows employers to reimburse employees tax-free for their individual health insurance.

individual coverage health reimbursement arrangements

How does ICHRA work?

Simple Administration

Reimbursing is easy compared

to managing group insurance.

Flexible Designs

Allows complex plan designs

for a wide range of situations.

No Contribution Limits

Allows employers to define

unrestricted benefit budgets.

ICHRA SETUP

Easily Reimburse Your Employees for Health Insurance

ICHRA (we pronounce it “ick-rah”) is a game-changer for employers looking to provide health benefits for their employees. It is a powerful and flexible HRA designed for scale.

ICHRA: The New Way

Powerful new HRAs simplify the process of providing health insurance and provide you with peace of mind. Say goodbye to complicated group plans.

ICHRA Guide

A practical handbook for employers, brokers, and benefits professionals regarding the new Individual Coverage HRA
Read Now

Talk to an Expert

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

ICHRA FAQs

ICHRA has brought with it many questions and we've got answers!

Read more on the blog

What is an ICHRA?

ICHRA stands for “Individual Coverage Health Reimbursement Arrangement” and is the newest standalone HRA that enables employers of all sizes to reimburse their employees tax-free for health insurance premiums and medical expenses. 

How does the individual coverage HRA work?

An individual coverage HRA is an employer-funded HRA that reimburses employees for medical premiums and expenses. Employees pay their individual insurance premiums and/or medical expenses (depending on how the employer designs the ICHRA) and then submits receipts for reimbursement from the employer. The employer establishes the reimbursement allowances per employee.

What’s the difference between a QSEHRA and an ICHRA?

While there are numerous differences, the primary contrast between QSEHRA and ICHRA is eligibility based on company size, limitations on contributions from employers, and design flexibility. For example, a QSEHRA can only be offered by businesses with less than 50 employees, while an ICHRA is available for businesses of any size. QSEHRAs have annual contribution limits, while ICHRAs have no limits. While both ICHRA and QSEHRA need to be offered to employees on the same terms, ICHRA allows for more design flexibility with 11 customizable class distinctions compared to QSEHRAs 4 classes.

For a side-by-side comparison of the two HRAs, read our blog titled, “Individual Coverage HRA (ICHRA) vs. QSEHRA”.

What is required from an employee to participate in ICHRA?

An employee must fall within one of the designated classes set forth by the employer, and the employee must have an ICHRA-compliant individual insurance plan to be eligible. Our post on employee requirements for ICHRA eligibility dives into the details for your workers, and don't miss our post on ICHRA requirements that every business owner needs to know.  

Are there minimum participation rates?

No, there are no minimum participation rates for ICHRA. This is a big difference over traditional group plans which typically require 70% participation.

Note: If you are offering a group plan to one employee class and ICHRA to others, minimum class sizes may apply.

What are "employee classes" and how do they work?

The ICHRA classes are as follows:

  • 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

The amounts offered to employees can be increased within each class based on either age or number of dependents.

ICHRA also features a new hire rule which allows employers to offer new employees an Individual Coverage HRA while grandfathering existing employees into a traditional group health plan.

Does an employer have to fund an ICHRA or do they put money in as needed?

ICHRA (as well as QSEHRA) is a reimbursement arrangement rather than an account. This means that employees will typically pay for insurance or medical care themselves and then file a reimbursement claim. Employers only pay out funds to employees when a claim is made and approved. While some employers may choose to setup separate bank accounts for tracking purposes, it is not required

Can Employees participate and receive Premium Tax Credits (PTC)?

No, but employees will have an option to opt out of the new HRA for a year which will allow the employee to be eligible for tax credits. An employee is able to opt out of the ICHRA after looking at their allowance amount and finding that it was low enough so that any policy they purchased would be considered “unaffordable” and wouldn’t provide any value under ACA.

Can an ICHRA and HSA work together?

Yes. However, a successful integration depends on how the ICHRA is originally setup by the employer.

An ICHRA must be designed to only reimburse premiums (not premiums and expenses) in order for the employee to be eligible to make contributions to an HSA. Additionally, an individual must have a High Deducible Health Plan (HDHP) to participate in an HSA as well as carry an ICHRA-compliant individual insurance plan.

We've put together a very comprehensive post on how HRAs and HSAs work together if you want more context. 

have questions about ICHRA?

Let our ICHRA administration experts help.

Just tell us a little bit about yourself and we will connect you with the right people. 
Brokers & Partners

Are you a Licensed Broker or another Referral Partner interested in a partnership with Take Command?

Employers & Admins

Are you an Employer or Company Admin interested in an HRA for your company? Let's talk!

I’m an Employee

Is your employer offering you an HRA through Take Command and you have questions? Connect with us!

Great, please use one of the options below for help.

Chat With Us

Our customer support team is online right now ready to help answer all your quick questions.

Email Us

Drop us a note and we'll make sure it gets in the hands of the right person.

We look forward to talking with you.

Before scheduling, please join our next live webinar or check out our broker program.

We look forward to connecting with you.

Do you have questions? Great! We probably have some pretty good answers. Let us know what you need, and we’ll make sure the right team member gets connected with you.

Great, please use one of the options below for help.

Chat With Us

Our customer support team is online right now ready to help answer all your quick questions.

Email Us

Drop us a note and we'll make sure it gets in the hands of the right person.

We look forward to talking with you.

To save some back-and-forth scheduling, please select a time that works best for you. We'll give you a ring!

We look forward to connecting with you.

Do you have questions? Great! We probably have some pretty good answers. Let us know what you need, and we’ll make sure the right team member gets connected with you.

Great, please use one of the options below for help.

Chat With Us

Our customer support team is online right now ready to help answer all your quick questions.

Email Us

Drop us a note and we'll make sure it gets in the hands of the right person.

We look forward to talking with you.

To save some back-and-forth scheduling, please select a time that works best for you. We'll give you a ring!

We look forward to connecting with you.

Do you have questions? Great! We probably have some pretty good answers. Let us know what you need, and we’ll make sure the right team member gets connected with you.