Advanced Flex Plan Administration with the Human Touch

Individual Coverage HRA

Introduced in 2020, the Individual Coverage HRA (ICHRA) allows Employers who either do not offer a Group Health Plan or who do not offer one to every employee class to provide funds to employees to purchase individual health insurance coverage and pay for 213(d) qualified expenses.



An Employer cannot offer an ICHRA and a Group Health Plan to the same employee. The Employer may use classes to offer ICHRA and GHP to different types of employees.


  • Benefits are tax-free only if covered by a health plan that provides minimum essential coverage (MEC).
  •  To be eligible, an employee cannot be offered a Group Health Plan.

Permitted Classes

An Employer may divide employees into classes to offer an ICHRA instead of a Group Health Plan to a specific class of employees.

  • Full-time employees
  • Part-time employees
  • Seasonal employees
  • Salaried workers
  • Employees working in the same geographic location
  •  Employees covered by a collective bargaining agreement
  • Employees who have not satisfied a waiting period
  • Non-resident aliens with no U.S.-based income
  • Temporary employees of staffing firms

Class Size Limitations

Classes must meet the below minimum sizes to be eligible.

Employer Size

Minimum Class Size

Fewer than 100 employees


100-200 employees

10% of employees

More than 200 employees


Advantages of an ICHRA


  • Employers save on premiums by not offering a Group Health Plan.


  • Employees receive tax-free reimbursement to purchase individual coverage or for 213(d) qualified expenses.

Versus Qualified Small Employer HRA

The ICHRA  is similar to a Qualified Small Employer HRA (QSEHRA). Below are the key differences.



Premium reimbursement

213(d) medical expense reimbursement (optional)

Available to Employers of all sizes


Subject to contribution limits


Employees may opt out to receive full premium tax credit


How it Works

For Employers

The Employer defines the terms of the QSEHRA and enrolls new employees.

ICHRA funds may be available to employees on the first day of the Plan Year (or on a monthly or quarterly basis).

EMPOWER administers the Plan and issues reimbursements to employees to purchase coverage or pay for qualified medical expenses.

For Participants

Employees are typically automatically enrolled in the QSEHRA.

Participants purchase individual coverage or pay for medical expenses with their own form of payment.

Participants file claims to EMPOWER with a receipt for coverage or service. EMPOWER reimburses claims conveniently from the Employer’s bank account.

Want the Latest Contribution Limits and Guidelines?

EMPOWER’s Benefits Solutions Guide takes the guesswork out of benefits by providing a comprehensive synopsis of each plan type, as well as comparisons and sample scenarios.

EMPOWER Participant Mobile App Download

If you have an FSA, HRA, or HSA with EMPOWER, we encourage you to download the Mobile App to manage your benefits on the go!

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I am a Participant

I am an Employer

Click the above link if you are a participant who has an FSA, HSA, or HRA with EMPOWER.

Click the above link if you are an Employer or Consultant. 

Download Forms

Click one of the links below to view the available forms.

I am a Participant

Click the above link if you are a participant who has an FSA, HSA, or HRA with EMPOWER.

I am an Employer

Click the above link if you are an Employer or Consultant.