Individual Coverage Health Reimbursement Arrangements let Utah employers reimburse employees for individual marketplace plans rather than sponsoring group coverage. For some businesses, this is simpler, more flexible, and more cost-effective than traditional group health insurance.
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What Is an ICHRA
An Individual Coverage HRA (ICHRA) allows employers of any size to reimburse employees, tax-free, for individual health insurance premiums and qualifying medical expenses. Instead of the employer selecting and sponsoring a group health plan, employees choose their own individual marketplace plan and the employer reimburses them up to a set monthly amount.
For Utah employers, ICHRAs are particularly attractive in several situations: geographically dispersed workforces (where a single group plan network doesn't work well), employees who already have strong individual plans they prefer to keep, very small employers (under 10 employees) where group plan minimums and participation requirements are difficult to meet, and businesses with varied employee demographics where different plan types suit different employees.
ICHRA reimbursements are tax-free to employees when used for qualifying expenses, and fully tax-deductible for the employer. Employees who receive ICHRA reimbursements can still enroll in marketplace plans, but their subsidy eligibility is affected by the size of the ICHRA offer relative to the benchmark plan in their county.
ICHRA: Available to employers of any size. No cap on reimbursement amounts. Can vary reimbursement by employee class (full-time, part-time, seasonal, etc.). Employees cannot receive marketplace subsidies if the ICHRA is considered "affordable."
QSEHRA (Qualified Small Employer HRA): Only for employers with fewer than 50 employees who don't offer group coverage. 2026 reimbursement caps: $6,350/individual, $12,800/family. Simpler administration than ICHRA. Employees can receive marketplace subsidies reduced by the QSEHRA amount.
Utah employers implementing ICHRAs need to establish the plan, notify employees, set reimbursement amounts by employee class, and integrate with payroll. Third-party HRA administrators simplify this significantly. A broker who specializes in ICHRAs can recommend the right administrator and structure the reimbursement amounts to attract and retain employees while staying within budget.
A licensed Utah broker evaluates whether ICHRA or group coverage better serves your business and employees — at no cost.
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