An Individual Coverage Health Reimbursement Arrangement (ICHRA) allows employers to offer a flexible, tax‑advantaged health benefit that employees can use to purchase individual health insurance coverage through Georgia Access For Business. Instead of providing a traditional group health plan, employers contribute a defined monthly allowance that employees can apply toward premiums and other qualified medical expenses.
ICHRAs allow employers to take a defined contribution approach to health benefits, offering greater control over budget and contribution strategy while shifting administrative responsibilities away from plan design and toward eligibility, funding, and benefit-related communication.
How ICHRAs work
- Employers set a monthly contribution amount for each eligible employee.
- Employees use those funds to purchase individual health insurance coverage.
- Contributions are tax‑advantaged for both employers and employees.
- Employees must maintain individual health insurance coverage to receive reimbursements.
Employer flexibility
Employers may vary contribution amounts based on:
- Employee age
- Employee location
- IRS‑defined employee classes
- Other factors permitted under federal rules
There is no federal cap on employer contributions. Employers must, however, offer a contribution that meets IRS affordability standards if the ICHRA is intended to satisfy employer mandate requirements.
Why employers choose ICHRAs
ICHRAs offer:
- Predictable employer costs
- Less administrative burden
- Broad flexibility in plan design
- Employee choice and portability
- Compatibility with a wide range of workforce structures
ICHRAs have become the preferred option for many small and mid‑sized employers because they combine cost control with meaningful employee choice.
Key differences between ICHRA and QSEHRAs
| Feature | ICHRA | QSEHRA |
|---|---|---|
| Employer size limit | None | Fewer than 50 FTEs |
| Contribution limits | No federal cap | IRS‑set annual maximums |
| Employee classes | Allowed | Not allowed |
| Coordination with PTCs | Not permitted | Permitted under certain conditions |
| Availability on GAFB | Available at launch | Potentially coming in a future phase |