What is an ICHRA and how does it work?

An Individual Coverage Health Reimbursement Arrangement, or ICHRA for short, is a newish type of health benefit where your employer gives you a set amount of pre-tax money each month to help pay for your health insurance premium. Despite its mouthful of a name, ICHRA is pretty simple and aims to make getting health coverage a breeze.

How does your StretchDollar ICHRA work?

We designed our ICHRA plans for employees at small businesses — simplifying nearly everything about health benefits and making it possible to get access to coverage in a snap. In a nutshell, here's how it works:

• Your employer sets aside tax-free money each month (your benefit) to help you pay for your health insurance premium.
• You then shop for a health insurance plan that fits your needs on the health insurance marketplace, and use your monthly benefit to help cover the cost.

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

Why have I never heard of an ICHRA before?

The short answer is that it's 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.