An ICHRA allowance can vary by rating area, so every employee needs a recorded work location.
Rating area is tied to where an employee works under the rules, and it drives both the allowance and the plans available. Recording each location, including remote and multi-site staff, comes before setting any dollar amount.
What to record for each location.
Primary Worksite
Record the primary worksite for every employee. Rating area follows that location under the rules.
Multiple Sites
Employers with more than one site can set an allowance for each rating area. The calculator shows the cost of each.
Remote Employees
Remote staff need a recorded location too. Counsel should confirm how rating area applies to them.
Employees Who Travel
Drivers, field crews and traveling staff need a base location for rating purposes. Pick one and apply it consistently.
Different Premiums by Area
Premiums for the same plan differ by rating area, which changes the allowance needed to pass affordability.
Moves and Transfers
When an employee moves, their rating area and allowance may change. Decide the process in advance.
How rating areas change an ICHRA allowance.
A rating area is the region an insurer uses to price individual plans. The same plan can cost much more in one area than in the next, so an employer with more than one location needs a written rule for where each employee works and an allowance that works in every area.
Why location changes the number
The affordability test uses the lowest cost silver plan in the employee rating area. A site in a higher-priced area needs a larger allowance to pass than a site in a lower-priced one, even when the employees are paid the same. Location is also a permitted class, so an employer can set a different allowance for each rating area as long as everyone in the class is treated alike.
An illustrative example
An employer pays its hourly staff $15 an hour and has one site in each of two rating areas. The premiums below are made up. The calculation uses 10.22 percent of $1,950, which is $199.29, as the most an employee should pay.
| Site | Silver premium (illustrative) | Smallest allowance that passes |
|---|---|---|
| Site A, lower-priced area | $480 | $280.71 |
| Site B, higher-priced area | $610 | $410.71 |
Illustrative only. The example uses the rate-of-pay safe harbor for an hourly employee, age and plan held constant.
If the employer set one allowance for both sites, it would have to use the higher figure to pass at Site B, and it would overpay at Site A. Setting two allowances by rating area keeps each site affordable without paying more than necessary.
Five steps to map locations
- Collect the primary work address for every employee, including remote and hybrid staff.
- Map each address to its rating area using the state list.
- Write the rule for employees who split time or travel, such as the base location they report to, and have counsel confirm it.
- Calculate the smallest passing allowance for each area and class.
- Decide how moves and transfers work, including when a new allowance takes effect.
Edge cases to decide in advance
- Remote employees. Record where each one works. Counsel should confirm how rating area applies to them.
- Drivers and field crews. Pick the base location they report to and apply it the same way for everyone.
- Employees who live far from the worksite. They may buy plans in the market where they live, so check the plans and networks available there as well.
- Mid-year moves. The plan should say when the new rating area and allowance begin.
Once the map is done, the calculator shows the monthly cost for each area, and our plan options page shows which carriers and networks exist near each location.
The questions employers ask about ICHRA rating areas.
What is a rating area?
A geographic region that insurers use to price individual plans. Premiums can differ from one rating area to the next.
Can I set different allowances by area?
Yes. Location is a permitted class, and every employee in a class must be treated the same.
How are remote employees handled?
Record where each remote employee works and have counsel confirm how the rules apply.
What about employees at several sites?
Pick the primary worksite and apply the rule to everyone the same way.
Does a move change the allowance?
It can, if the new location is in a different rating area. The plan should say when the change takes effect.
Do rating areas affect affordability?
Yes. The test uses the lowest cost silver plan in each employee area, so costly areas may need higher allowances.
Who maps employees to rating areas?
We map every location for you and flag the ones that need counsel.
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 questions and the industries they affect.
Plan Options Near Worksites
Which individual plans exist at each site.
Class Assignment
Sort each employee group into a permitted class.
Employee Enrollment Help
How employees compare and enroll in coverage.
ICHRA for Trucking and Logistics
Drivers, owner-operators and dispatch.
ICHRA for Retail
Part-time and seasonal store teams.
ICHRA for Home Health and Social Services
Field staff and variable schedules.
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.
An independent employee benefits consulting firm. We look at the entire benefits program: cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →