ICHRA Calculator

Estimate Individual Coverage HRA costs, compare to group health insurance, and check ACA affordability — by state and employee class

Free • No Login Required • Calibrated to 2026 Market Data

Step 1 — Your Company

Company size, location, and workforce demographics shape both your ICHRA budget and employees' marketplace premium costs.

Number of Employees ?Total employees you plan to cover under the ICHRA. ICHRAs are available to employers of any size — from 1 to 10,000+ employees.Source: IRS Final Rules on ICHRAs, 84 FR 28888 (2019)

State ?Marketplace premiums vary 40%+ by state. Employees purchase individual plans on their state's ACA marketplace, so location directly affects how far your ICHRA allowance goes.Source: CMS 2026 Marketplace Premium Data

Average Employee Age 38 ?Average age of your workforce. ACA marketplace plans use a 3:1 age rating curve — a 64-year-old pays up to 3x what a 21-year-old pays. This affects whether your ICHRA allowance fully covers premiums.Source: CMS Federal Age Curve; ACA 3:1 Rating Band

Average Household Income ?Used to determine ACA affordability. Under ICHRA rules, the employee's required contribution for self-only silver plan coverage cannot exceed 9.02% of household income for the offer to be considered affordable.Source: IRS Rev. Proc. 2024-35; ACA Section 36B

Employee Class Breakdown

ICHRAs allow different allowances by employee class. Adjust the mix of your workforce below.

% Full-Time 60%

% Part-Time 15%

% Salaried 15%

% Hourly 10%

Step 2 — ICHRA Design

Set your monthly ICHRA allowance and optional variations by age and family size. ICHRAs give you granular control over benefits spending.

Monthly ICHRA Allowance per Employee ($) ?The monthly amount you reimburse each employee tax-free for individual health insurance premiums. There is no IRS maximum for ICHRAs (unlike QSEHRAs). Most employers offer $300-$800/month.Source: IRS Final Rules, 84 FR 28888; HRA Council 2025 Benchmarks

Vary allowance by age? ?ICHRAs permit age-based variation up to a 3:1 ratio (oldest-to-youngest). This mirrors the ACA age rating curve and lets you offer more to older employees whose premiums are naturally higher.Source: 26 CFR 54.9802-4; IRS Final Rules on ICHRAs

Allowance for Youngest (Age 21) ($)

Allowance for Oldest (Age 64) ($)

Allowances are linearly interpolated between youngest and oldest. Max ratio: 3:1.

Vary allowance by family size? ?You can offer different ICHRA amounts based on family status. Common multipliers: single = 1.0x, employee + spouse = 1.5-2.0x, family = 2.0-3.0x.Source: IRS Final Rules on ICHRAs, 84 FR 28888

Single Multiplier

EE + Spouse Multiplier

Family Multiplier

Step 3 — Compare to Group Plan

Enter your current (or expected) group health plan costs to see how ICHRA stacks up. If you don't currently offer coverage, leave the premium at $0.

Current Group Plan PEPM ($) ?Per-employee-per-month cost for your current group health insurance plan (blended across all tiers). The 2025 national average is approximately $703/month for single coverage.Source: KFF 2025 Employer Health Benefits Survey

Employer Contribution % 75% ?Percentage of the group premium paid by the employer. The national average is 83% for single coverage. With ICHRA, you control 100% of your spending since you set the allowance amount.Source: KFF 2025 EHBS

ICHRA Cost Analysis

Total Annual ICHRA Cost to Employer

Monthly allowance x employees x 12

Based on your ICHRA design inputs above

Total Annual Group Plan Cost

PEPM x employees x 12 x employer contribution

Estimated Annual Savings with ICHRA

Compared to traditional group plan

Employee Perspective: Allowance vs. Marketplace Premium

Estimated Marketplace Silver Premium (Self-Only)

Based on state + age

Employee Out-of-Pocket (After ICHRA)

Monthly gap or surplus

ACA Affordability Check

ICHRA vs. Group Plan vs. QSEHRA

Feature	ICHRA	Group Plan	QSEHRA
Employer size	Any size	Any size	<50 employees only
Max allowance	No cap	N/A (premium-based)	$6,350/ind, $12,800/fam (2026)
Employee classes	11 classes allowed	Same plan for all	Same for all (age/family only)
Employee choice	Any ACA plan	Employer-chosen plan	Any ACA plan
Tax treatment	Tax-free reimbursement	Pre-tax premium	Tax-free reimbursement
ACA compliance	Satisfies employer mandate	Satisfies employer mandate	Small employer only
Cost predictability	100% fixed budget	Annual renewal risk	100% fixed budget
Admin complexity	Moderate (TPA needed)	Low-moderate	Low

Per-Employee Annual Cost Comparison

What is an ICHRA?
An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded, tax-advantaged benefit that reimburses employees for individual health insurance premiums and medical expenses. Established by IRS Final Rules published June 20, 2019 (84 FR 28888), ICHRAs allow employers of any size to provide a defined contribution toward employees' individual market coverage.

ICHRA Allowance Calculation:
Base allowance is the monthly amount you set. If age variation is enabled, allowances are linearly interpolated from youngest (age 21) to oldest (age 64) using the formula: allowance = young + (age - 21) / (43) * (old - young). The IRS permits up to a 3:1 oldest-to-youngest ratio, mirroring the ACA age curve.

Family Size Multipliers:
When family variation is enabled, the base allowance is multiplied by the selected factor for each tier. The calculator uses a blended rate assuming 60% single / 25% EE+spouse / 15% family unless overridden by class data.

Marketplace Premium Estimates:
Self-only silver plan premiums are estimated using CMS 2026 marketplace data: national baseline of $496/month for a 40-year-old, adjusted by state cost index and CMS federal age curve factors.

ACA Affordability Test:
Under IRS Notice 2024-55, an ICHRA is "affordable" if the employee's required contribution for the lowest-cost silver plan (self-only) minus the ICHRA allowance is no more than 9.02% of household income divided by 12. If unaffordable, employees may opt out and claim premium tax credits instead.

Group Plan Comparison:
Group plan costs use the entered PEPM multiplied by employer contribution percentage. ICHRA costs are fully predictable since the employer sets a fixed allowance. Group premiums are subject to annual renewal increases (national average: 7-10% per year).

Data Sources: IRS Final Rules on ICHRAs (84 FR 28888, 2019), IRS Notice 2024-55 (ICHRA affordability), CMS 2026 Marketplace Premium Data, KFF 2025 Employer Health Benefits Survey, HRA Council 2025 Benchmark Report.

Built on IRS Rules and Real Marketplace Data

This calculator uses official regulatory guidance and current marketplace pricing to model ICHRA costs accurately.

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IRS Final Rules (2019)

84 FR 28888 — the foundational regulation establishing ICHRAs, employee class rules, and affordability requirements

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CMS Marketplace Data

2026 benchmark silver plan premiums by state and age from Healthcare.gov and state-based exchanges

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IRS Notice 2024-55

Updated ICHRA affordability percentage (9.02%) and safe harbor rules for employer compliance

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KFF Employer Survey

2025 national benchmarks on group premiums, employer contributions, and plan design trends

Want Help Designing Your ICHRA?

Get a personalized ICHRA implementation plan with employee class strategy, allowance optimization, and ACA compliance review — from a benefits advisor.

Analyst Notes

The Individual Coverage HRA (ICHRA) modeling applies the regulatory framework established in the June 2019 final rule (84 FR 28888) and subsequent IRS guidance. Allowance optimization considers the applicable employee classes permitted under the regulations and the interaction between ICHRA allowances and premium tax credit eligibility on the individual market exchange.

Cost projections compare the employer's current group plan costs against the sum of ICHRA allowances plus administrative platform fees. The affordability determination uses the required ICHRA affordability test, which compares the employee's self-only cost for the lowest-cost silver plan in their rating area minus the ICHRA allowance against the ACA affordability percentage threshold.

ICHRA arrangements offer maximum flexibility for geographically distributed workforces and employers seeking to move from a defined-benefit to defined-contribution health benefit model. The break-even analysis shown accounts for both direct cost savings and the administrative simplification of eliminating group plan management.