ICHRA (Individual Coverage HRA)
Employer reimburses employees tax-free for individual ACA marketplace coverage instead of offering a group plan.
Full explanation
An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded benefit that reimburses employees tax-free for individual health insurance premiums and qualified medical expenses. ICHRAs let employers — especially small businesses — provide health benefits without offering a traditional group plan. Employees pick any ACA-compliant individual plan that fits their needs; the employer reimburses up to a defined cap. ICHRA contributions don't count as taxable income to the employee, and don't reduce ACA premium tax credit eligibility unless the employer's offer is deemed 'affordable' by IRS standards.
📎 Primary source: official source
Need help with ICHRA (Individual Coverage HRA)? Call 256-800-4885 for free guidance from a licensed insurance agent in our nationwide network.