How to Help Employees Pay for Health Insurance

How you help, tax-free

With an ICHRA, you set a monthly allowance and reimburse employees tax-free for the individual plan they choose. Because it''s tax-free, more of your contribution actually reaches employees than it would through a taxable bonus or stipend.

It''s flexible by design

You can offer the same amount to everyone, or vary it by employee class and family size, and you can start small and grow the contribution over time. There''s no minimum contribution and no participation requirement, so you can help as much or as little as your budget allows.

What employees get

Employees choose a plan and network that fit their family, funded by your tax-free contribution, and the plan is portable — it''s theirs, not tied to the job. With a broker guiding enrollment, the experience is smooth.

Getting started

Decide between ICHRA and QSEHRA based on your size, set a contribution amount, and a broker handles the plan document, notice, and employee enrollment — often at no direct cost to you. The result helps with one of your team''s biggest expenses while keeping your costs predictable.

Tax-free vs. taxable ways to help

There are two fundamentally different ways to help. Route the money through an ICHRA or QSEHRA and it is tax-free to the employee and payroll-tax-free to you. Add it to a paycheck as a stipend and it is taxable on both sides. The tax-free path delivers more coverage per dollar, which is why most employers prefer it.

How much to contribute

There is no required amount with an ICHRA — you set it, and you can vary it by employee class. Many employers start by matching what they would have spent on a group plan, or by choosing an amount that meets ACA affordability, then adjust over time as the budget allows.

Keeping it compliant

To keep the help tax-free, a few basics matter.

• Adopt a written plan document.
• Collect proof that employees have qualifying coverage.
• Send the required employee notice.
• Keep substantiation records on file.