State incentives
The Indiana ICHRA Tax Credit
Indiana made history as the first state to reward employers directly for offering defined-contribution health benefits, enacting a tax credit for ICHRA and QSEHRA adoption through House Bill 1004, effective as of 2024 (HRA Council, 2024–2025). Here''s a plain-English overview — and why the underlying benefit is worthwhile with or without a credit. This is general information, not tax advice; verify current rules with the state and your advisor.
By Joe Rosenblatt · Founder & ICHRA Broker, The ICHRA Broker
Key facts
- First state to enact
- Indiana
- Enabling law
- House Bill 1004
- Effective
- As of 2024
- Program size
- Up to $10 million per year statewide
- Who it targets
- Small businesses
- Signed by
- Governor Eric Holcomb
What the Indiana credit is
Indiana''s House Bill 1004 created a dedicated employer tax credit for businesses that adopt an ICHRA or QSEHRA, making Indiana the first state in the nation to incentivize defined-contribution health benefits this way. It was signed into law by Governor Eric Holcomb and took effect as of 2024 (HRA Council, 2024–2025).
Who it''s designed for
The program is structured to support small businesses — the segment that makes up the largest share of ICHRA and QSEHRA adoption and most often offers coverage for the first time. The goal is to make it easier for small Indiana employers to start offering health benefits.
How the program is sized
Indiana structured the initiative with up to $10 million per year in credits available statewide. Because programs like this typically have caps and eligibility rules that can change year to year, confirm the current per-employer amount and availability before counting on it.
Why Indiana did it
States have an interest in healthy local insurance markets and competitive small businesses. By encouraging ICHRA and QSEHRA adoption, Indiana moves more residents into locally regulated individual coverage and helps small employers offer benefits — stabilizing the market without a state-run program.
How an employer tax credit generally works
A credit like this typically lets a qualifying employer offset part of its state tax liability for offering an eligible benefit, sometimes tiered by contribution level or size. The exact mechanics — eligibility, amount, and how to claim — are set by the state, so treat any figure as a starting point to confirm.
How to find out if you qualify
Because the program has specific rules, the right steps are to review the current guidance from the Indiana Department of Revenue (or the administering agency) and to work with a tax professional who can confirm your eligibility and handle the filing correctly.
The credit is a bonus, not the reason
Even without a credit, an ICHRA''s core advantages — a fixed, tax-free budget, no participation minimums, and employee choice — stand on their own. An Indiana credit simply improves an already-attractive decision; it shouldn''t be the sole reason to adopt.
Indiana in the national context
Indiana was first, but not alone for long. By 2025, Ohio, Georgia, and Texas had introduced their own ICHRA incentive bills, and Congress was weighing federal codification through the CHOICE Act — part of a broader, bipartisan move to support defined-contribution health benefits.
Staying current
State tax law changes, and program details or funding can be adjusted. Verify the current status of the Indiana credit before relying on it, and revisit it each year, since availability and amounts may shift.
About this information
Details here reflect what was reported for 2024–2025 and may have changed. This page is general educational information, not tax or legal advice. Confirm the current Indiana rules with the state and a qualified tax advisor.
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Yes. Indiana was the first state to enact an employer tax credit for adopting an ICHRA or QSEHRA, created through House Bill 1004 and effective as of 2024. Confirm current eligibility and amounts with the state and your tax advisor.
Joe Rosenblatt — Founder & ICHRA Broker, The ICHRA Broker
Joe Rosenblatt is the founder of The ICHRA Broker, an independent ICHRA brokerage that helps small businesses offer tax-free health benefits without a group plan. He works directly with employers and their advisors on ICHRA and QSEHRA setup, plan design, and compliance.
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