Dealerships pay sales staff, technicians and managers in different ways. An ICHRA can sort them by class instead of forcing one plan on everyone.
An individual coverage HRA lets a dealership or dealer group set allowances by permitted class, such as full-time and part-time or salaried and hourly, and vary them by store location. The work is in the class design, the treatment of commission pay and the affordability math.
Why dealerships look at an ICHRA.
Salaried and Hourly Classes
Salaried managers and hourly technicians or porters fall into different permitted classes. A dealership can set one allowance for each, as long as everyone in a class is treated the same.
Each Store Can Be Its Own Rating Area
A dealer group with stores in more than one rating area can set an allowance for each area. The calculator shows what each store costs before you commit.
Full-Time and Part-Time Classes
Part-time lot staff, detailers and drivers can sit in their own class with their own allowance, rather than being left out or priced into the group plan.
Turnover Gets a Known Cost
Dealerships hire and lose people often. A fixed monthly allowance per class makes the cost of each new hire known in advance.
A Waiting Period for New Hires
A new hire can wait up to 90 days before the allowance starts. The waiting period applies the same way to everyone in the class.
A Different Option from Group Health
An ICHRA can replace the group plan or run beside it for selected classes. The right answer depends on participation and cost.
The dealership issues that decide whether it works.
Affordability for Larger Dealer Groups
A dealer group with 50 or more full-time equivalent employees must offer coverage that passes the affordability test. Check each class, not just the average.
Commission and Variable Pay
Sales pay swings from month to month, which affects the affordability safe harbor you choose. Model the options against real pay records before setting allowances.
Plan Choice Near Each Store
Employees buy individual plans in their own market. Check carriers and networks near each store so the allowance buys real choices.
Employee Shopping Experience
Technicians and sales staff are not benefits shoppers. Someone has to walk them through the marketplace and the reimbursement steps.
Notice and Timing
Eligible employees must receive written notice at least 90 days before the plan year begins. Count back from the start date.
Variable-Hour Employees
Detailers and part-time staff often work uneven hours. How you classify them affects both the allowance and the reporting.
What to settle before moving a dealership to an ICHRA.
Which employees are in which class?
Job title is not a permitted class. Sort sales, service and management staff by full-time, part-time, salaried or hourly status.
How is commission pay treated?
Pick the affordability safe harbor with your tax advisor, using actual pay records.
Which stores are in which rating area?
List every store address and its rating area before setting allowances.
Who helps employees buy a plan?
Decide who answers questions, and when, during the first enrollment.
Does every class pass affordability?
Test each class on its own, because one failing class is a compliance problem.
How are owners and dealer principals treated?
Owners and partners can have different tax treatment, so review them separately with counsel.
The questions dealerships ask about ICHRAs.
Can a dealership give sales staff and technicians different allowances?
Only if they fall into different permitted classes, such as salaried and hourly or full-time and part-time. Job title alone is not a class, so counsel should review the definitions.
Can a dealer group set different allowances for each store?
Yes. Employees in different rating areas can be placed in different classes, and every employee in a class must be treated the same.
Does commission pay affect the affordability test?
It can, because the safe harbor you use is measured against pay. Model the options against real pay records with your tax advisor.
Can part-time lot staff and detailers get an allowance?
Yes. Part-time employees are a permitted class and can have their own allowance.
Does a new hire have to wait before the allowance starts?
A waiting period of up to 90 days is allowed, and it must apply to everyone in the class in the same way.
What notice do employees need?
Written notice must reach eligible employees at least 90 days before the plan year begins, so count back from the start date.
Should a dealership keep its group plan?
Some keep it for one class and use an ICHRA for others, and some replace it entirely. The answer depends on cost, participation and class design, and we model both.
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.
CMS: Individual Coverage HRAs →
U.S. Department of Labor: Employee Benefits Security Administration →
More ICHRA guides for other workforces.
ICHRA for Retail
Part-time and seasonal store teams.
ICHRA for Trucking and Logistics
Drivers, owner-operators and dispatch.
ICHRA for Mortgage Lenders
Commissioned loan officers and salaried staff.
ICHRA for Local Service Businesses
Small crews across many trades.
ICHRA for Manufacturing
Plants, shifts and bargaining units.
ICHRA by Industry
Compare all seventeen workforces side by side.
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