Construction crews move between job sites, seasons and union halls. An ICHRA can follow the worker where a single group plan cannot.
An individual coverage HRA lets a contractor set separate allowances for salaried office staff, non-union field crews and seasonal labor, and carve out union-covered employees. The work is in the class definitions and the rating-area rules.
Why contractors look at an ICHRA.
Office and Field Can Be Separate Classes
Federal rules allow salaried and hourly classes. A contractor can set one allowance for project managers and estimators and another for field crews, as long as everyone inside a class is treated the same.
Union Employees Can Be Carved Out
Employees covered by a collective bargaining agreement can be their own class, so a contractor can leave union crews on their trade fund while offering an ICHRA to non-union staff. Confirm the agreement language first.
Seasonal Labor Gets a Defined Cost
Cold-weather slowdowns and peak-season hiring make a fixed group premium hard to predict. A seasonal class with a set allowance caps the employer cost per head.
Employees Choose Plans Where They Live
Crews often live in different counties. An ICHRA lets each person buy individual coverage in the market where they live, with allowances that can vary by rating area.
Waiting Periods Fit High Turnover
An employer can apply a waiting period of up to 90 days to new hires. That matters in trades where early turnover is common.
A Different Option from Group Health
An ICHRA is not a replacement for every group plan. We compare it with the group alternative side by side.
The construction issues that decide whether it works.
Union and Multiemployer Funds
If crews are covered by a trade fund or a bargaining agreement, the contribution terms may limit what you can change. Review the agreement with counsel before designing classes.
Affordability for Larger Employers
Employers with 50 or more full-time equivalent employees must offer an affordable allowance. Variable hours make it important to test each class.
Rating Area Rules
Allowances can vary by rating area, and the class is usually tied to the employee primary worksite. Mobile crews need a clear written rule.
Prevailing Wage and Fringe Work
On public projects, health contributions can count toward required fringe benefits in some cases. Ask counsel how an ICHRA contribution is treated.
Notice and Timing
Employees must receive a notice at least 90 days before the plan year. Late-starting crews and new hires need a written process.
Employee Support in the Market
Individual coverage means employees shop. A crew that has never done that needs enrollment help.
What to settle before moving crews to an ICHRA.
Which crews are covered by an agreement?
List every bargaining agreement and trade fund before drawing class lines.
Where does each person primarily work?
Tie each field employee to a worksite so the rating area rule is clear.
What allowance holds up in the slow season?
Model cost for peak and off-peak headcount, not a single average.
Who helps employees choose a plan?
Plan enrollment support before the notice goes out.
Does the allowance pass the affordability test?
If you have 50 or more full-time equivalents, test every class.
Is the group plan still the better answer?
Compare the two before you decide, not after.
The questions construction employers ask about ICHRAs.
Can a contractor offer an ICHRA to office staff and a group plan to field crews?
Yes, if the groups fall into permitted classes such as salaried and hourly, and every employee in a class is treated the same. Counsel should review the class definitions.
What happens to union employees?
Employees covered by a collective bargaining agreement can be placed in their own class, which an employer can choose not to offer an ICHRA. The agreement itself controls what is allowed, so review it first.
Can the allowance be different by county?
Allowances can vary by rating area within a class, based on the employee location. Increases by age are allowed within limits. The rules need to be written down and applied consistently.
Can we put seasonal crews in a separate class?
Seasonal employees are a permitted class. The definition should be specific and applied to everyone who fits it.
Does an ICHRA work for a contractor with 50 or more employees?
It can, but the allowance has to meet the ACA affordability test for the year, and larger employers should model each class. The 2027 affordability percentage is 10.22%.
How long does it take to switch?
Plan on starting well before the plan year, because employees need a notice at least 90 days ahead and time to shop for individual coverage.
Do we still need to tell employees anything else?
Yes. Employees receive the ICHRA notice, and group plan compliance notices may still apply to other classes. See our employee notices page.
General information about individual coverage HRAs, not legal or tax advice. Plan-specific questions belong with ERISA counsel and your tax advisor, and we will bring them in.
Where these details come from.
This page summarizes public guidance reviewed in October 2026. Rules change, so confirm current requirements with counsel. Federal agencies now also call ICHRAs CHOICE Arrangements; the rules are unchanged.
CMS: Individual Coverage HRAs →
U.S. Department of Labor: Employee Benefits Security Administration →
More ICHRA guides for other workforces.
ICHRA for Trucking and Logistics
Drivers, owner-operators and dispatch.
ICHRA for Manufacturing
Plants, shifts and bargaining units.
ICHRA for Local Service Businesses
Small crews across many trades.
ICHRA for Staffing Agencies
Internal staff and placed employees.
ICHRA for Real Estate and Property Management
Agents, managers and on-site staff.
ICHRA by Industry
Compare all seventeen workforces side by side.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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