An ICHRA isn't a card or a group plan — it's a monthly allowance you use to buy your own health coverage. We explain every step, in plain English.
Your 4-step process
ICHRA isn't automatic. You have to act during your enrollment window. Miss it and you may have to wait a full year.
Find your employer's ICHRA notice — it has your monthly allowance amount and your enrollment deadline.
Go to HealthCare.gov (or your state marketplace) and pick an ACA-compliant plan that accepts ICHRA.
Pay your first month's premium directly to the insurer. Keep your payment confirmation — you'll need it monthly.
Upload your receipt to the administrator portal. Get reimbursed up to your monthly allowance, tax-free.
Important check
If your employer's allowance is "affordable" by IRS rules, you can't claim the Premium Tax Credit. Enter your numbers to find out.
In 2026, "affordable" means your ICHRA allowance covers the cheapest self-only Silver plan for less than 9.96% of your annual income. Enter your numbers below.
Use your total household modified adjusted gross income (MAGI)
Check your ICHRA notice or ask your HR department
Enter your income and
allowance to see your result
Common questions
ICHRA stands for Individual Coverage Health Reimbursement Arrangement. Your employer contributes a fixed monthly dollar amount to a health benefit account. Instead of being covered under a company group plan, you shop for your own individual health insurance — and your employer reimburses you up to the allowance for your monthly premium.
Think of it as a health wallet: your employer funds it, you spend it on the plan you chose yourself.
Yes, you can opt out if you have other coverage (spouse's plan, Medicare, Medicaid) or if the ICHRA isn't "affordable" and you want to keep your ACA subsidy.
If the ICHRA is affordable (see calculator above), opting out disqualifies you from the Premium Tax Credit. If it's not affordable, opting out lets you use the Tax Credit on the Marketplace. Get this right before you decide — use the calculator above or talk to a licensed agent.
It depends on affordability. In 2026, the IRS threshold is 9.96% of household income. If your employer's monthly ICHRA allowance covers the self-only Silver plan for less than 9.96% of your annual income — the ICHRA is "affordable" and you can't claim the Tax Credit.
If the allowance is too small (not affordable), you can opt out of the ICHRA and use the Marketplace with your subsidy instead. Use the calculator above to check →
The primary reimbursable expense is your monthly health insurance premium for an ACA-compliant individual plan. Some ICHRAs also cover qualified medical expenses (copays, prescriptions, deductibles) — check your plan document.
Not reimbursable: non-ACA plans (short-term, indemnity-only), dental or vision unless your plan specifically includes them, costs your insurance already paid, and premiums you paid before your ICHRA start date.
Unused allowances do not roll over by default — they return to the employer at the end of the month. Unlike an HSA, you can't save ICHRA money. Submit your premium receipt every single month, even if it's the same amount — missing a cycle means losing that month's allowance.
Only if your employer set it up as an HSA-compatible ICHRA (sometimes called a "Limited ICHRA" that only reimburses premiums). If your ICHRA also covers general medical expenses, it disqualifies you from contributing new money to an HSA.
Ask your employer or check your plan document to see if it's HSA-compatible. Read the full guide →
Maybe. If you have a Special Enrollment Period (SEP) — triggered by a qualifying life event like marriage, having a baby, losing other coverage, or moving — you may be able to enroll outside the standard window.
Contact your ICHRA administrator immediately if you believe you have a SEP. The window is typically 60 days from the qualifying event.
Still have questions?
Email us at info@ichra.digital — we respond within 24 hours.