The Employer’s Guide to the ICHRA

Year after year, health care costs are on the rise and finding ways to cover those expenses can be challenging.  Yet, health insurance remains on top of the list for the most sought-after benefit by employees.  As an employer who wants to attract and retain talented employees, looking for ways to offer employees the health benefits they deserve without breaking your budget can be difficult.   

According to a Quest Diagnostics Report, more than three-quarters (77%) of employers say they want to lower health care benefit costs for their employees but don’t have the tools to do so. 

One option:  The ICHRA.  Find out what it is, how it works, the benefits, and the next steps in implementing it into the business. 

What is it?

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, with no contribution caps, 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.

How does it work?

An employer designs the ICHRA for their business, establishing what is allowed for reimbursement and setting the contribution limits.  Once the ICHRA has been designed, classes established, and contribution limits set, employees can pick any individual health plan that fits their needs.  When the employee has a qualified health care expense, they can request reimbursement by submitting their receipts. 

The benefits?

The ICHRA provides a new level of flexibility to the employer and employee.  Employers can choose the level they want to contribute to the employees, as little or as much, as their budget allows, with employees choosing their individual health coverage that best fits their needs.  The ICHRA helps both the employers and employees save money each month.  Employers do not have to pay to provide a traditional group health plan to any or all employees, and employees have the additional money to help pay for their eligible expenses.  ICHRA reimbursements are tax-deductible for employers and employees receive their reimbursements tax-free. 

Next steps?

The employer calls and talks to a BASE® representative to see if the ICHRA is right for the business.  Whether a business has 15, 50, or 200 employees, an employer can leverage the cost savings and flexibility the ICHRA offers.

The ICHRA is a flexible cost-effective alternative to traditional group health benefits.  For more information on the BASE® Individual Coverage HRA, contact BASE® at 888.386.9680 or visit

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