What is an ICHRA and how does it work?

An Individual Coverage Health Reimbursement Arrangement, or ICHRA for short, is a newish group health benefit where employers are able to give their employees a set amount of pre-tax money to help pay for their health insurance premiums. Despite its mouthful of a name, ICHRA is pretty simple and aims to make offering health benefits a breeze.

How does StretchDollar's ICHRA work?

We designed our ICHRA group plans for small businesses — simplifying nearly everything about health benefits and making it possible to get access to benefits in a snap. In a nutshell, our plans work like this:

• The employer sets aside tax-free money each month (the benefit) to give to their employees to help with their health insurance premiums.
• The employee then shops for a health insurance plan that fits their needs on the health insurance marketplace, and uses the monthly benefit to help cover the cost.

StretchDollar transfers the pre-tax money from the employer to the employee in a safe and compliant way. We also offer licensed brokers to guide employees to a health plan that fits their needs.

Why have I never heard of an ICHRA before?

The short answer is that it is relatively new. In 2020, federal legislation created ICHRAs to broaden the appeal for HRAs (health reimbursement arrangements). The existing HRAs didn't catch on because they were limited by the types of businesses that could offer them and the amount an employer could give to their team. ICHRAs don't have those limitations — any size business can offer any size benefit to employees for their health insurance expenses.

StretchDollar focuses on small businesses, leveraging ICHRA to create the simplest and most affordable health benefit option around.