ICHRA (Individual Coverage HRA)
Available to employers of any size.
Employers give employees a set allowance each month to reimburse them for individual Marketplace coverage or other qualified health plans.
Employees must have individual coverage (not a group plan) to use ICHRA funds.
Amounts can vary by employee class (e.g., full-time vs. part-time, salaried vs. hourly).
QSEHRA (Qualified Small Employer HRA)
Only available to small employers with fewer than 50 full-time employees.
Provides a fixed, tax-free reimbursement for health insurance premiums and medical expenses.
All eligible employees must be offered the same terms.
Has annual maximum contribution limits set by the IRS.
Key difference
ICHRA = flexible, any size employer, can vary amounts by employee group.
QSEHRA = for small employers only, with uniform benefits and IRS-set limits.
Subsidy impact
If you are offered an ICHRA or QSEHRA, it may affect whether you qualify for Marketplace subsidies. The Marketplace will determine if your employer’s HRA counts as “affordable” when you fill out your application. If it does, you will not be eligible for premium tax credits.
Quick tip
If your employer offers one of these arrangements, you can use the reimbursement to shop for and enroll in a Marketplace plan through HealthSherpa. For help, reach out to our Consumer Support team at 855-772-2663, Monday–Friday, 6am–4pm PT.