An Employer's Guide to ICHRAs

For several decades, employer-sponsored insurance has been synonymous with group insurance. Collective bargaining power, tax incentives, and a lack of viable alternatives ensured that the group insurance model was locked in long ago — but not always for the better. 

Large annual premium increases have left employers scrambling to balance budgets. Employees have had to absorb the costs their employers can’t. A one-size-fits-all approach has meant that people must select from plan options that don’t make financial and medical sense for everyone in the company. And many small businesses have been priced out of the market altogether.

But now, finally, there's another option.

Individual Coverage Health Reimbursement Arrangements (ICHRAs) are a new approach to employer-sponsored health benefits. Instead of a group insurance plan, each employee chooses their own insurance, subsidized by a pre-tax employer contribution. ICHRAs can make costs predictable, allow each employee to personalize their health plan, and ensure coverage is possible for businesses of every size.