ICHRA allowance budget calculator: what would an age-based allowance cost?
Enter employees and the monthly allowance for three age bands to see the total cost, the comparison with your current group spend and the age variation check. Built for employers weighing an ICHRA.
Budget an age-based ICHRA allowance.
The bands and amounts are your design. The result updates as you type.
Your estimate
A budgeting model, not a plan design. ICHRA rules are detailed, so review class definitions, notices and affordability with your advisor.
What is an ICHRA?
An individual coverage health reimbursement arrangement lets an employer reimburse employees for premiums they pay for individual market coverage. The employer sets an allowance and the employee chooses a plan. Employers can offer different allowances to different classes of employees, such as full-time and part-time, and the allowance can vary by age and by number of covered dependents within a class.
What is the age rule?
The allowance for older participants can be higher, but participants of the same age in a class must receive the same amount. The amount for the oldest participants cannot be more than three times the amount for the youngest. The calculator checks that ratio for the amounts you enter. Using the 21 to 34 band as the youngest and 50 to 64 as the oldest is a simplification.
Common questions
Does an ICHRA replace our group plan?
It can for a class of employees. Many employers keep a group plan for some classes and offer an ICHRA to others, within the class rules. Owners should also check whether they can take part themselves: see ICHRA and QSEHRA Tax Treatment for Owners.
How do we pick the allowance?
Start from what you spend now and what individual plans cost for each age band in your area. Our ICHRA vs group plan calculator can help compare the two.
Do we need to check affordability?
Yes. Large employers must test the offer under the ACA employer mandate. Review the test with your advisor.
What notices are required?
Employees must receive a notice before the plan year. We can walk through the timeline with you.
Laws and rules referenced
26 C.F.R. § 54.9802-4 — Individual coverage HRAs: integration with individual market coverage and Medicare, classes of employees and notice.
This tool gives estimates for education, not tax or legal advice. Rules change, so confirm your situation with a qualified advisor.
Talk to us about an ICHRA
Book a 30-minute call and we will look at your workforce, your current plan and whether an ICHRA fits. Visit us at 41000 Woodward Avenue, Suite 350 East, Bloomfield Hills, MI 48304, or call 248.370.8853.
Unhappy With Your Current Broker?
Switching to CFH takes one signed letter. Your carrier, plan, ID cards and payroll deductions stay the same.
Related guides and tools.
Health and Cost Strategy
How we manage plan cost without cutting coverage.
Free Employer Benefits Tools
The full set of free calculators for employers.
Second Opinion on Your Renewal
Send us your renewal and we will review it.
Dependent Coverage Cost Calculator
See how much of plan cost goes to dependents.
Employee Premium Percent of Pay Calculator
See what share of pay the employee premium takes.
Deductible HRA Cost Calculator
Estimate the cost of reimbursing part of the deductible.
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. →