Individual Coverage HRA (ICHRA)

What is an Individual Coverage Health Reimbursement Arrangement?

Traditional group health insurance plans can be expensive for employers and may not meet the diverse needs of their employees. An Individual Coverage Health Reimbursement Arrangement (ICHRA) is a relatively new option for employers to offer health insurance to their employees.

Under an ICHRA, employers provide a fixed amount of money to their employees to purchase individual health insurance coverage.

The employee can choose their own health insurance plan that suits their needs and preferences and get reimbursed by the employer for the cost of the plan.

Benefits of Offering ICHRAs to Employees

There are several reasons why employers should consider offering ICHRAs to their employees:


With ICHRAs, employees have the freedom to choose the health insurance plan that works best for them and their families. They can select a plan that meets their specific healthcare needs, rather than being limited to the options provided by their employer.

Cost Control

For employers, ICHRAs provide a way to cap their healthcare expenses while still offering a valuable benefit to employees. Employers can set a fixed contribution amount each month, which helps them better manage their healthcare costs.


ICHRAs are compliant with the Affordable Care Act (ACA) and other federal healthcare regulations. This means that employers can offer ICHRAs without worrying about violating any laws or facing penalties.

Attract and Retain Talent

In today’s competitive job market, offering unique and attractive benefits is essential for attracting and retaining top talent. ICHRAs provide a valuable benefit that can help set an employer apart from its competitors.


ICHRAs are portable, which means that employees can take their health insurance plan with them even if they leave their current job. This helps to improve employee mobility and provides them with a sense of security in case they decide to switch jobs.

It’s important to note that ICHRAs are not suitable for all employers. They are typically best suited for small to medium-sized businesses or households that are looking for a cost-effective way to offer health insurance benefits to their employees. Larger companies may find that traditional group health insurance plans are a better fit for their needs.

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