Technology teams are remote, growing and spread across states. An ICHRA lets each employee buy coverage where they live.
A software company using an ICHRA gives each employee a monthly allowance and lets them shop for an individual plan in their home state, so nobody has to negotiate a separate group plan for every location. The work is in class design, allowances by rating area, and a notice process that keeps pace with hiring.
Why technology companies look at an ICHRA.
Remote Employees in Many States
A single group plan can be hard to fit to employees in many states. With an ICHRA, each employee buys an individual plan where they live, and the employer sets the allowance.
Allowances by Rating Area
Allowances can vary by rating area, so an employee in a costly market is not priced like one in a cheap market. Rules must be written and applied the same way to everyone in a class.
Fast Hiring Without New Plans
New hires in a new state do not require a new group plan. They get the allowance and shop in their own market.
Salaried and Hourly Classes
Engineers and support staff can receive different allowances when they fall into separate salaried and hourly classes, as long as the class definitions are clear.
A Waiting Period for New Hires
An employer can set a waiting period of up to 90 days, which matters when hiring is fast.
A Different Option from Group Health
An ICHRA is not right for every technology company. We compare it with the group plan side by side.
The technology issues that decide whether it works.
Affordability for Larger Employers
Growth to 50 or more full-time equivalents brings the federal requirement that the allowance be affordable. Check each class, and each rating area within it.
Employees Only
An ICHRA covers employees. Contractors and other non-employees need to be classified correctly, and counsel should review the classification.
Plan Choice by State
Individual market options differ by state and county. Check carriers and networks where your employees live.
Employee Shopping Experience
Employees who are used to a group plan may need help comparing individual plans. Enrollment support affects take-up.
Notice and Timing
Employees need an ICHRA notice at least 90 days before the plan year, and new hires generally need it by the date they become eligible. Set a process.
Multi-State Compliance
State rules can differ for employers with employees in several states. Counsel should review before launch.
What to settle before moving a remote team to an ICHRA.
Where does each employee live?
Rating areas follow the employee, so keep the roster current.
Who is an employee and who is a contractor?
Confirm classification before building classes.
What does the allowance cost as we grow?
Model headcount growth by state, not the current roster.
Who helps employees buy a plan?
Plan enrollment support before the notice goes out.
Does every class pass affordability?
Past the 50 full-time equivalent mark, check every class for affordability.
Is the group plan still the better answer?
Compare the two before you decide.
The questions technology companies ask about ICHRAs.
Can an ICHRA cover employees in different states?
Yes. Each employee buys an individual plan where they live, and the allowance can vary by rating area. Counsel should review multi-state compliance.
Can the allowance be different by location?
Within a class the allowance may differ by rating area, tied to where the employee lives. Put the rule in writing and apply it consistently.
Can we put engineers and support staff in different classes?
Salaried and hourly status are both permitted classes. Define them clearly and apply them to every employee who fits.
Does an ICHRA cover contractors?
No. It is for employees. Contractors and other non-employees should be classified correctly with counsel.
Does an ICHRA work for a company with 50 or more employees?
It can, but the allowance has to meet the ACA affordability test for the year, so model each class. The 2027 affordability percentage is 10.22%.
How early do we need to start?
Employees must receive an ICHRA notice at least 90 days before the plan year starts, and they need time to shop. Plan well ahead.
What notices do we still send?
Employees receive the ICHRA notice, and other compliance notices may still apply. See our employee notices page.
Nothing here is legal or tax advice; it is a plain overview of how these arrangements work. Where a decision depends on your own situation, we bring your tax advisor and ERISA counsel into the discussion.
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 Professional Services
Partners, associates and support staff.
ICHRA for Defense Contractors
Federal contract requirements and billing rates.
ICHRA for Mortgage Lenders
Commissioned loan officers and salaried staff.
ICHRA for Real Estate and Property Management
Agents, managers and on-site staff.
ICHRA for Medical and Dental Practices
Clinical staff, owners and associates.
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.
An independent employee benefits consulting firm. We look at the entire benefits program: cost, plan performance, risk and administration.
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