Small businesses often struggle to offer affordable health benefits, but the Individual Coverage HRA (ICHRA)provides a cost-effective, tax-free alternative to traditional group plans. With ICHRA for small businesses, employers can set their own budgets while allowing employees to choose the health plan that works best for them.
At Skyline Benefit, we help small businesses maximize their ICHRA benefits and simplify the setup process. If you’re looking for a flexible way to offer health benefits in 2025, here’s everything you need to know.
What is ICHRA for Small Businesses?
An Individual Coverage HRA (ICHRA) lets employers reimburse employees for health insurance costs instead of providing a standard group plan. Employees can pick any ACA-compliant plan that meets their needs, and employers provide tax-free reimbursements for premiums and medical expenses.
Why Small Businesses Choose ICHRA
- Cost Control – Employers set their own budgets.
- Tax-Free Benefits – Reimbursements are tax-free for both employers and employees.
- More Employee Choice – Employees pick their own plan instead of being limited to a group plan.
- No Minimum Participation – Unlike traditional plans, there’s no minimum number of employees required.
How Does ICHRA Work?
Setting up ICHRA for small businesses is simple:
- Set a Monthly Allowance – Employers decide how much to reimburse employees.
- Employees Pick a Health Plan – They choose any ACA-compliant individual plan.
- Submit Proof of Expenses – Employees provide receipts for insurance payments.
- Get Reimbursed – Employers reimburse employees up to the set allowance.
Example: If an employer sets a $500 monthly allowance, employees can use it toward health insurance premiums, copays, and other eligible costs.
Who Can Offer ICHRA?
- Small businesses that want a flexible, cost-effective benefits solution
- Startups looking to attract talent with competitive health benefits
- Nonprofits needing a tax-advantaged health coverage option
As long as employees have individual health insurance, they can qualify for an ICHRA.
Why Work with Skyline Benefit?
Setting up ICHRA for small businesses requires careful planning. At Skyline Benefit, we make the process easy by:
- Helping you design an ICHRA plan that fits your budget.
- Ensuring compliance with ACA regulations.
- Providing ongoing support to manage your plan.
Need Help with ICHRA for Small Businesses?
Skyline Benefit is an independent group health insurance broker in Fullerton, CA, specializing in affordable health benefits for small businesses.
Our team helps employers set up ICHRA for small businesses, ensuring compliance and maximizing tax-free reimbursements.
Schedule a consultation today. Call us at: (714) 888-5112.