Rising costs, new tariffs, and market uncertainty are squeezing small business budgets from every angle. But cutting employee health benefits altogether doesn’t have to be the answer.
An ICHRA is a smart and flexible way to offer team health coverage, without overspending.
They’re tax-advantaged, budget-friendly, and perfect for businesses navigating economic uncertainty.
Here’s why now is the time to rethink your benefits strategy.
What is an ICHRA?
An ICHRA (Individual Coverage Health Reimbursement Arrangements) is a flexible alternative to traditional group health insurance.
Instead of paying for a group health insurance policy, employers reimburse employees tax-free for premiums on individual health plans—and in some cases, other healthcare expenses too. In other words, if your employees choose to purchase their own health insurance coverage, an ICRHA allows you to help cover some or most of your team’s plan costs. It’s a simple, scalable way to offer health coverage.
ICHRA vs. QSEHRA: What’s the Difference?
In addition to ICHRAs, QSEHRAs (Qualified Small Employer Health Reimbursement Arrangements) stand as a similar employee healthcare alternative. While both offer cost-savings for employees and employers, they work slightly differently:
- ICHRAs can be used by businesses of any size and allow different reimbursement rates for different classes of employees.
- QSEHRAs are designed specifically for small businesses with fewer than 50 full-time employees and have set annual limits on how much you can reimburse.
How Tariffs Impact the Cost of Traditional Health Insurance
Recent tariffs—particularly on imported goods like steel, aluminum, electronics, and equipment are making costs higher across many industries in the United States. For small businesses to mid-size businesses, this often leads to tighter margins and less spending flexibility.
Something that many people don’t consider though—tariffs can drive up the cost of traditional health insurance. You may be asking yourself, how is that possible?
As mentioned, tariffs raise the costs of many goods that are imported into the U.S. When the costs of things like medical supplies, pharmaceuticals, and hospital equipment go up, the increase in price gets passed down into the healthcare system.
In general, hospitals, providers, and insurers tend to absorb these increases at first—but over time, they adjust their premium rates to compensate for the hike in cost. For business owners, this often means even higher premiums for group health plans.
Instead of throwing off your entire budget with a traditional coverage plan you can’t afford, it’s worth looking into other options like ICHRAs and QSEHRAs. These alternative group plan options provide more cost control, while still providing employees with affordable coverage, that way everyone’s happy.
Why an ICHRA Make Sense Right Now
1. Control Your Costs Without Cutting Value
Traditional health plans can be expensive—and they don’t usually get cheaper year over year. Especially with the economic uncertainty we face today, many people are considering more cost-effective alternatives. An ICHRA lets you decide how much to reimburse, so you can offer meaningful benefits without risking your budget.
2. Flexibility That Works for You and Your Team
Employees get to choose the plan that works best for them, rather than being boxed into only one or two pre-selected coverage options. That can be a big advantage for teams with varying needs, ages and lifestyles.
3. Built-in Tax Advantages
Reimbursements made through tan ICHRA are tax-free for both you and your employees, as long as the funds are used for qualified expenses. This is a great way to give money back to your employees and get some back for yourself too!
4. Attract and Retain Top Talent
In a tough hiring market, benefits matter. Offering a personalized, affordable health benefit—even one that’s reimbursement-based—can help you attract and retain great team members.
5. Simple Setup and Maintenance
These plans are easier to manage than traditional group insurance. There are no renewals, or carrier negotiations—just a simple way to support your team 365 days a year.
Explore Group Health Coverage Options with GHQ!
While we all want to cut corners and save some extra money during these uncertain times, it’s important to be knowledgeable when making financial decisions. If you’re considering not insuring your employees, or getting rid of their current health coverage entirely, think again!
Group health insurance alternatives like an ICHRA or a QSEHRA are great ways to manage your team’s healthcare costs, and save money in the long run, all while still providing employees with affordable health benefits.
When you decide to explore your team’s health insurance options, you don’t have to do it alone! Group Health Quotes (GHQ), is here to help you with all your businesses health insurance needs. We offer free, no-obligation quotes, side-by-side plan comparisons, and 24/7 access to licensed insurance agents.
To get a free quote and learn more, simply enter your ZIP code in the box on the right or call us at (888)-571-0291
