ICHRAs offer an alternative to traditional group health insurance, giving employees the flexibility to choose their own coverage while enabling employers to control costs.
Why Employers Choose an ICHRA
Cost control
Unlike traditional group plans where premiums fluctuate, you set a fixed annual reimbursement allowance, making budgeting predictable year after year.
Maximize Tax Savings
Employer contributions are fully tax-deductible as a business expense, and reimbursements are also tax-free for employees with qualifying coverage, ensuring maximum tax efficiency for everyone.
Employees Choose their Plan
Employees are not limited to one or two plans selected by their employer. They can select any individual plan or Medicare that works for them, giving them total control over their personal healthcare.
Reduced Administrative Workload
You no longer need to manage complex group plans. Your role simplifies to setting the allowance, freeing up HR time and resources.
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Frequently Asked Questions
What are the mechanics of an ICHRA?
An ICHRA runs on a 12-month plan year. Employers set a monthly allowance that can vary by employee class and can scale by age and family size. Employees are reimbursed for eligible expenses up to their balance. Salusion does not permit carryovers, allows a 75-day year-end runout, and has a 0-day termination runout.
Read the full guide →Who is eligible for an ICHRA?
Employees in an employer-defined class are eligible and must receive the benefit on the same terms and conditions, with exceptions allowed for variations based on age or family size. Tax-free reimbursement requires individual health insurance or Medicare that meets MEC.
Read the full guide →What is an ICHRA class?
An ICHRA class is a defined employee group an employer can offer an ICHRA to, such as full-time, part-time, salaried or hourly, geographic area, seasonal, waiting period, collectively bargained, nonresident aliens, and certain temporary employees. A class that gets an ICHRA cannot also get a group plan. Minimum class-size rules can apply when mixing ICHRAs and group plans across classes.
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