ICHRA (Individual Coverage HRA)
An ICHRA (Individual Coverage Health Reimbursement Arrangement) lets an employer reimburse employees, tax-free, for individual-market health premiums instead of offering a single group plan.
ICHRA in one sentence
Instead of buying one group plan for everyone, an employer sets a monthly contribution, and each employee buys the individual plan that fits them best and gets reimbursed tax-free up to that amount.
Why employers consider it
- Budget control. You decide the contribution; costs are predictable and don’t swing with a group’s annual renewal.
- Employee choice. People pick the plan and network that suits their family, rather than a one-size-fits-all option.
- Scalable. Contributions can vary by employee class (e.g. full-time, part-time, seasonal) within the rules.
What to watch for
ICHRA is a defined-contribution alternative to a group plan — not a “plan” itself. Individual-market availability and pricing vary by state, and an ICHRA must be set up to meet federal affordability and coordination rules. We help employers model contributions and roll it out cleanly.
Related terms
Health Share
A health share is a member-funded medical cost-sharing arrangement where members contribute monthly and share one another's eligible medical costs. It is not insurance and is not regulated as insurance.
Direct Primary Care
Direct Primary Care is a flat monthly membership that gives you a direct relationship with a primary care practice — longer visits, easier access, and transparent pricing — outside of the insurance billing system.