How to Sell ICHRAs: The Future of Small Employer Health Benefits

Individual Coverage Health Reimbursement Arrangements (ICHRAs) are one of the fastest-growing alternatives to traditional group health insurance, and most employers have never heard of them. Since becoming available in 2020, ICHRAs allow employers of any size to provide tax-free reimbursements for employees to purchase individual health insurance on the ACA marketplace or elsewhere. For small employers (under 50 employees), this can be a game-changer that provides benefits flexibility while controlling costs.

The ICHRA value proposition is simple: instead of choosing one health plan for all employees, the employer gives each employee a defined allowance to buy the plan that works best for them. The employer controls the cost (fixed monthly allowance), the employee gets choice (they pick their own plan), and everything is tax-advantaged (employer contributions are a business expense, employee reimbursements are tax-free). For small businesses where employees have vastly different healthcare needs — a 25-year-old single employee and a 55-year-old with a family don't need the same plan — ICHRAs provide unprecedented flexibility.

When presenting ICHRAs to prospects, lead with the cost control story. "Right now, you're locked into one carrier's rate increase every year, and you have no way to cap your costs. With an ICHRA, you decide exactly how much to contribute per employee per month. If you set it at $500/month, that's your cost — period. Your employees use that $500 to buy an individual plan that fits their needs. Some might choose a lower-cost plan and pocket savings, while others might add their own money for a richer plan. The beauty is that you control the budget while employees get more choice."

The main objections you'll face are around employee experience and administration. Address them directly: ICHRA administration platforms like Take Command, PeopleKeep, and Venteur handle the enrollment, compliance, and reimbursement process automatically. Employees get guided support to choose a plan, submit claims through a simple app, and receive reimbursement within days. As for the concern that individual market plans aren't as good as group plans — in many states, the individual market is extremely competitive, with robust network options from major carriers. Run a specific comparison for the prospect showing what their employees could get on the individual market with the proposed ICHRA allowance versus what they have today. The numbers often speak for themselves.