Individual Coverage HRA (ICHRA)
An employer-funded account that reimburses employees for individual health insurance premiums and medical expenses.
What is Individual Coverage HRA (ICHRA)?
An Individual Coverage HRA (ICHRA) is a type of Health Reimbursement Arrangement that allows employers to reimburse employees tax-free for individual health insurance premiums and qualified medical expenses. Unlike traditional HRAs, ICHRAs work with individual market coverage instead of group plans.
ICHRAs give employees flexibility to choose their own health insurance from the individual market or healthcare.gov while receiving employer funding. Employers set the reimbursement amount, which can vary by employee class (full-time, part-time, geographic location, etc.).
Importantly, if you have an ICHRA that can be used for health insurance premiums, you can still have an HSA if you're enrolled in an HSA-eligible HDHP. The ICHRA can reimburse you for premiums, and you use your HSA for other qualified expenses.
Frequently Asked Questions
Can I have an HSA with an ICHRA?
Yes, as long as you're enrolled in an HSA-eligible HDHP. The ICHRA can reimburse premiums; your HSA covers other medical expenses.
How is an ICHRA different from a regular HRA?
Traditional HRAs work with employer group plans. ICHRAs reimburse for individual market coverage, giving employees more choice.
Who funds an ICHRA?
The employer funds it entirely. Employees don't contribute to ICHRAs.
Related Terms
Health Reimbursement Arrangement (HRA)
An employer-funded account that reimburses employees for qualified medical expenses and sometimes health insurance premiums.
Qualified Small Employer HRA (QSEHRA)
An HRA for small businesses that reimburses employees for individual health insurance and medical expenses.
High-Deductible Health Plan (HDHP)
A health insurance plan with a higher deductible and lower premiums that qualifies you to open an HSA.
Learn More
Track your HSA expenses
Now that you understand the terms, put your knowledge to work. Track expenses and reimburse yourself tax-free.
Get Started Free