Question 1

How does ICHRA compare to group health plans?

Accepted Answer

Unlike group health plans, ICHRAs can offer tax advantages for both employers and employees, streamline administration, and potentially increase employee satisfaction by providing more personalized health coverage options. See ICHRA vs Group Plans for a longer write-up on ICHRA vs group health plan.

Question 2

How does ICHRA compare to QSEHRA?

Accepted Answer

Both are health reimbursement arrangements that allow employers to reimburse employees for their health insurance premiums and medical expenses on a tax-advantaged basis. ICHRA offers greater flexibility in terms of employer size, contribution limits, and employee eligibility criteria, making it a versatile option for a broader range of businesses. See ICHRA vs QSEHRA for a longer write-up on ICHRA vs QSEHRA plan.

Question 3

Who is eligible for ICHRA?

Accepted Answer

Employers have the flexibility to set eligibility criteria for ICHRA. It can be offered to full-time, part-time, seasonal workers, and even certain classes of employees as defined by the employer.

Question 4

Is there a tax benefit to offering an ICHRA?

Accepted Answer

Yes, and this is a big reason to use ICHRAs. Reimbursements through HRAs are generally tax-free for both the employer and the employee, making it the only way to give your team pre-tax money for healthcare. If you instead just give your employees money to pay for their healthcare, that money is considered income and is taxable. Learn more about ICHRA vs healthcare stipends.

Question 5

Can ICHRA be used with any insurance plan?

Accepted Answer

You can use ICHRAs to reimburse employees for any qualified individual health plan. This includes plans purchased on Thatch, Healthcare.gov, or directly from an insurance carrier. View ICHRA plans available for your employees.

Question 6

What happens if employees don’t use their full allowance?

Accepted Answer

You have the ability to handle this however you like: you can permit unused allowances to roll over to the next period or expire.

Question 7

Can I limit the ICHRA allowance to only health insurance premiums?

Accepted Answer

Yes, you can. We generally recommend that employers allow employees to use their allowance for both premiums and medical expenses, both because this is a better experience for employees, but also because employees tend to max out the budget on the most expensive plan available to them otherwise.

Question 8

Do I have to offer the same allowance to all employees?

Accepted Answer

No, employers can vary allowances based on different classes of employees, such as full-time, part-time, or by geographic location, among other criteria.

Question 9

Can an employer offer both ICHRA and a traditional group health plan?

Accepted Answer

Yes, employers can offer both, but not to the same class of employees. For example, full-time employees could be offered a traditional health plan, while part-time employees could be offered ICHRA.

Question 10

How do employees get reimbursed?

Accepted Answer

Employees submit proof of their medical expenses or insurance premiums to the employer or a third-party administrator like Thatch. Upon approval, they are reimbursed up to their allowance amount.

Question 11

Are there any contribution limits for ICHRA?

Accepted Answer

No, there are no minimum or maximum contribution limits for employers who offer ICHRA. Employers have the flexibility to set allowances based on different employee classes.

Question 12

Can I use Thatch to reimburse employees for the premiums related to a plan their spouse or domestic partner provided?

Accepted Answer

No, the ICHRA rules do not allow for this. You can only reimburse employees for their own premiums, but could provide a post-tax reimbursement separately.

	ICHRA	Group Plans
Cost Control Set a defined budget for each employee to avoid annual rate hikes
Ease of Administration Shift administrative burden to the individual insurance companies
Participation Flexibility Avoid minimum participation requirements
Customization Employees can select a plan that aligns with their specific healthcare needs
Employee Empowerment Employees can use leftover funds for other healthcare expenses

Custom ICHRA health plans with Thatch

Why businesses are switching to ICHRA with Thatch

Tailored benefits for every team — From HQ to remote

ICHRA reporting guide

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ICHRA vs group plans

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Calculate monthly healthcare budget

$545

$845

$1145

ICHRA frequently asked questions

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