ICHRA for Florida Small Businesses

What Is an ICHRA?

An Individual Coverage Health Reimbursement Arrangement (ICHRA) allows employers of any size to reimburse employees for individual health insurance premiums on a tax-free basis. Unlike QSEHRA, there is no cap on employer contributions, no size limit, and no requirement that all employees receive the same amount.

ICHRAs became available January 1, 2020, under IRS regulations. They represent a flexible alternative to traditional group health plans — the employer sets a defined budget; employees purchase their own individual coverage and submit for reimbursement.

Key Differences: ICHRA vs. QSEHRA

Feature	ICHRA	QSEHRA
Employer size limit	No limit	Under 50 FTEs only
Contribution limit	No IRS limit	$6,350/$12,800 (2026)
Employee class variation	Yes — different classes get different amounts	No — must be uniform (except family/individual)
Can coexist with group plan	Yes — for different employee classes	No — cannot offer both
ACA affordability test	Applies (for ALE employers)	Does not apply

Who Qualifies to Use ICHRA

Any Florida employer — regardless of size — can establish an ICHRA. However, key requirements apply:

Employees must have qualifying individual health coverage (on a marketplace plan, spouse's marketplace plan, or other MEC)
Employees on Medicare Part A+B or Part C qualify as having minimum essential coverage
Employees cannot participate in both an ICHRA and an employer-sponsored group plan simultaneously
If the ICHRA is "affordable" under ACA rules, employees are not eligible for marketplace premium tax credits

ICHRA Affordability and ACA Subsidies

For Applicable Large Employers (50+ FTEs), ICHRA must meet the ACA affordability standard (2026: employer contribution must be sufficient to make the lowest-cost Silver plan cost no more than 9.02% of household income). For small employers under 50 FTEs, this test doesn't apply to mandate compliance — but it still determines whether employees lose marketplace subsidy eligibility.

If the ICHRA is "not affordable" under the formula, employees may still be eligible for marketplace premium tax credits — but only on the reduced-credit basis. This is a significant planning consideration for Florida small businesses with low-wage workers who receive substantial marketplace subsidies.

Florida ICHRA Use Case: A Tampa employer with 80 employees offers ICHRA to part-time and remote employees in different counties, while offering a group plan to full-time Hillsborough County employees. ICHRA allows different contributions by employee class — part-timers might receive $200/month while full-timers are on a group plan entirely. This class-based flexibility is only available through ICHRA, not QSEHRA.

ICHRA Employee Class Options

ICHRA allows different reimbursement amounts for different classes:

Full-time vs. part-time employees
Salaried vs. hourly employees
Employees in different geographic locations (county or state)
Employees covered by a collective bargaining agreement
Seasonal employees
New employees during a waiting period

You cannot vary ICHRA amounts by age (beyond the ACA's 3:1 limit), health status, or other discriminatory factors. Within a class, contributions must be uniform (or scale by family size).

Frequently Asked Questions

Can my Florida small business use ICHRA and a group plan at the same time?

Yes — if the employees receiving each benefit are in different classes. For example, you can offer a group health plan to full-time salaried employees and an ICHRA to part-time hourly employees. The classes must be genuinely distinct and meet the minimum class size requirements (generally 10 employees if the employer has fewer than 100 employees). You cannot offer the same employee both an ICHRA and a group plan simultaneously. This class-based dual structure is a key advantage of ICHRA over QSEHRA.

How does an employee get reimbursed through an ICHRA?

Employees submit proof of individual health insurance enrollment and premium payment to the employer (or to a third-party ICHRA administrator). The employer verifies and reimburses up to the monthly ICHRA amount. Reimbursements are made through payroll or direct deposit. Most Florida employers use a third-party ICHRA platform (PeopleKeep, Take Command Health, or similar) to manage enrollment, verification, and reimbursement workflows. Administration costs typically run $20–$40/employee/month — factored into the total cost comparison versus group plan administration.

Evaluate ICHRA for Your Florida Business

We compare ICHRA, QSEHRA, and group plan options for your specific workforce and county. Call (877) 224-8539 or use the form. Florida License #L088529.