ICHRA vs group
ICHRA Or A Group Plan? Run The Numbers, Not The Hype
An ICHRA ends the renewal letter; a group plan keeps the employer in control of the plan. Here is how to decide — with the calculator doing the arithmetic on your census.
| Group plan | ICHRA / CHOICE Arrangement | |
|---|---|---|
| Who picks the plan | Employer | Each employee, on the individual market |
| Employer cost | Premium share, varies with the renewal | Fixed allowance by class |
| Renewal letter | Yes, every year | No; allowance is set by you |
| Tax treatment | Employer share deductible; employee share pre-tax via §125 | Allowance tax-free to employee, deductible to employer |
| ALE mandate (50+ FTE) | Satisfied if affordable and minimum value | Satisfied if the allowance makes the lowest-cost silver plan affordable |
| Best fit | Groups with good rates or strong employer-choice culture | Multi-state teams, high renewals, part-time classes |
Groom Law Group, Sept 2026; HRA Council 2026 Growth Trends Report (500,000+ lives in ICHRAs/QSEHRAs).
When ICHRA Wins
- The group renewal came in far above the individual market in your county
- Employees in several states or rating areas
- You want a fixed, predictable benefits budget
When Group Wins
- Level-funded quotes beat the individual market
- Employees value one employer-chosen network
- Higher-income groups where individual plans price badly