Designing the ICHRA to Work for Your Business

In recent years, businesses are finding that offering a traditional group health plan doesn’t work.  Whether it’s because it is too expensive, it’s too complex for their business structure, or the one-size-fits-all doesn’t meet their needs.  No matter the reason, another HRA has emerged as a great alternative. 

The Individual Coverage Health Reimbursement Arrangement (ICHRA) gives employers of any size the ability to reimburse their employees for their qualified individual insurance premiums or insurance premiums and non-insured health care expenses.  Employers can choose to offer to all employees or to specific classes to fit any budget. 

The BASE® ICHRA is an IRS-approved tax savings plan that allows employers to offer a more personalized health benefit.   Employers can set a budget and create some predictability when it comes to health benefits, while providing a medical benefit without paying group benefit rates.

To start, the employer must decide which employees are eligible for enrollment into the ICHRA by separating them into classes and establishing a monthly reimbursement allowance.  Eligible employees will select an individual health plan, pay for the health plan and any out-of-pocket expenses.  The employees will submit their premium and eligible out-of-pocket expenses for reimbursement.  The employer will then reimburse the employee on a tax-free basis, up to their maximum amount established. 

The ICHRA helps employers offer a health benefit that helps control cost, is simple to administer, and is personalized to their business.  This benefit allows employers to set a defined benefit limit for each employee, having greater control over the health benefits budget, while helping to reduce the risk of unexpected costs.  The ICHRA is a great fit for a variety of employers, including those:

  • With significant group rate increases year to year
  • With a high number of variable hour employees ( Hospitality or retail industry)
  • Looking to set a budget and help create predictability
  • Adding a benefit package when they didn’t offer one before

In turn, employees benefit from the ICHRA by having the power to choose the individual health insurance plan that works for them to meet their personal needs and provide them with more control over their health care. F

For more information on the BASE® Individual Coverage HRA (ICHRA), contact BASE® at 888.386.9680 or visit

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