Published: June 23, 2026.
ICHRA is an individual coverage health reimbursement arrangement. Employers of any size can reimburse employees tax free for individual ACA premiums and qualified medical expenses instead of sponsoring a group plan.
Key Takeaways
- ICHRA is an individual coverage health reimbursement arrangement. Employers of any size can reimburse employees tax free for individual ACA premiums and qualified medical expenses instead of sponsoring a group plan.
- ICHRA affordability is tested against the lowest cost Silver plan premium in the employee's rating area. If the ICHRA offer is affordable, the employee cannot receive APTC on the Marketplace. Brokers run both numbers before recommending a path.
- Brokers earn individual ACA commissions when employees enroll through the Marketplace with ICHRA reimbursement. The employer administers the reimbursement; the coverage is still individual, not group.
- ICHRA classes must be structured consistently. Employers cannot discriminate within a class, but they can offer different allowance amounts to different classes such as full time versus part time.
ICHRA affordability is tested against the lowest cost Silver plan premium in the employee's rating area. If the ICHRA offer is affordable, the employee cannot receive APTC on the Marketplace. Brokers run both numbers before recommending a path.
Brokers earn individual ACA commissions when employees enroll through the Marketplace with ICHRA reimbursement. The employer administers the reimbursement; the coverage is still individual, not group.
ICHRA classes must be structured consistently. Employers cannot discriminate within a class, but they can offer different allowance amounts to different classes such as full time versus part time.
Related field notes
Related glossary terms
- HRA (Health Reimbursement Arrangement)
- QSEHRA (Qualified Small Employer HRA)
- APTC (Advance Premium Tax Credit)
FAQ
Common broker questions about this term.
Can an employee take APTC if their employer offers ICHRA?
Only if the ICHRA offer is unaffordable under IRS rules. An affordable ICHRA offer makes the employee ineligible for APTC for that month.
Is ICHRA only for large employers?
No. ICHRA works for employers of any size, including small businesses that previously used QSEHRA or group coverage.
Do brokers need different appointments for ICHRA clients?
Individual Marketplace appointments still apply. The enrollment is individual ACA coverage. The employer runs the reimbursement program separately.
