How to Offer Health Benefits Without a Group Plan
June 23, 2026 · 5 min read
For years, offering health benefits meant buying a group health plan — expensive, rigid, and out of reach for many small businesses. That''s no longer true. You can give employees a genuine, tax-free health benefit without a group plan at all.
The tool is the HRA
With an Individual Coverage HRA (ICHRA) or a Qualified Small Employer HRA (QSEHRA), you set a monthly allowance, employees buy their own individual coverage, and you reimburse them tax-free. No group policy, no participation minimums, no renewal surprises.
Why it works
- Your cost is a fixed number you choose, not one the insurer sets.
- Employees pick plans and networks that fit their families.
- The money is tax-free for both sides.
- It works whether you have one employee or a hundred, across multiple states.
The trade-off
Employees enroll in individual coverage and submit proof, which a broker or platform handles. And an affordable ICHRA generally means employees take it instead of an ACA subsidy — worth modeling per person. For most small employers, these are minor next to the cost control gained.
How to start
Decide between ICHRA and QSEHRA based on your size and budget, set an allowance, and you''re offering benefits — without ever touching a group plan. A broker handles the plan document, notice, and employee enrollment, often at no direct cost to you.
Which HRA to use
Offering benefits without a group plan means using a health reimbursement arrangement, and there are two main flavors. An ICHRA works for any size employer, has no contribution cap, and lets you vary allowances by class. A QSEHRA is for employers under 50, is capped at an annual IRS limit, and must be offered on uniform terms.
What employees experience
From the employee's side it is straightforward: they pick an individual plan that fits their family, pay the premium, submit proof, and get reimbursed tax-free up to their allowance. They keep the plan even if they change jobs, because it is their own policy — not tied to your business.
A simple launch checklist
Getting started takes less than most owners expect.
- Choose ICHRA or QSEHRA and set allowances.
- Adopt a plan document and send the employee notice.
- Help employees enroll during their special enrollment period.
- Set up a substantiation and reimbursement process.
Frequently asked questions
Yes. An ICHRA or QSEHRA lets you give employees a tax-free monthly allowance to buy their own individual coverage — no group plan required.
Health benefits the modern way
Tell us about your team and get a free, no-obligation ICHRA quote — usually within 24 hours.