An Individual Coverage Health Reimbursement Arrangement (ICHRA) is a new type of health reimbursement arrangement, available as of 2020, in which employers of any size company can reimburse employees for some or all of the premiums.

By offering an ICHRA Medical Plan, your employer is able to define contribution limits and have more flexibility in plan design that will better fit the unique needs of their employees.

Your employer will establish the company's defined contribution which will offset some of the monthly premium expense for the employees. You will then select and purchase an Individual Healthcare Plan from the Individual Market that works best for you.

Once your coverage becomes effective, your employer will do a payroll deduction for your portion of the monthly premium based on the frequency of your pay periods. See example below.

ICHRA Medical Plans are centered on a reimbursement model (sometimes referred to as a defined contribution approach). Under this type of plan employers have greater control over costs and provides employees more options to choose from. This is very different than the group insurance market model (sometimes referred to as a defined benefit approach). Under this type of plan employers select a one-size-fits-most group plan and employees are limited to options selected by the employer.