Which Health Insurance Premiums Qualify for ICHRA Reimbursement?

Introduction 

If your employer offers an Individual Coverage Health Reimbursement Arrangement (ICHRA), you may be wondering which types of health insurance premiums you can get reimbursed for. An ICHRA allows employers to give workers tax-free money to buy their own health insurance, instead of offering a traditional group plan. But not every plan qualifies. Understanding which health plans are eligible for reimbursement under an ICHRA is crucial, allowing you to make informed choices and avoid unexpected costs.

This article explains the basics, outlines eligible plans, and provides resources to help you choose the right coverage.

What Is an ICHRA?

An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded benefit that reimburses employees for their individual health insurance premiums and qualified medical expenses. Launched in 2020 by the U.S. Departments of Treasury, Labor, and Health and Human Services, ICHRAs are designed to give employers more flexibility while expanding coverage options for workers.

Unlike a traditional group health plan, an ICHRA allows employees to purchase coverage directly from insurers on the Health Insurance Marketplace or, in some cases, through Medicare.

Eligible Health Plans for ICHRA Reimbursement

ACA-Compliant Individual Market Plans

• Purchased on Federal or state marketplaces 
• Must meet Affordable Care Act (ACA) essential benefits and coverage standards 
• Bronze, Silver, Gold, and Platinum plans qualify 

Medicare

• Parts A, B, C (Medicare Advantage), and D are eligible for reimbursement if the employee is enrolled in an ICHRA. 

Student Health Insurance Plans

• Many ACA-compliant student health plans qualify, as long as they meet federal standards. 

Ineligible Plans (Not Reimbursable)

• Short-term limited-duration insurance (STLDI) also known as Short-term medical (STM) or health plans  
• Health care sharing ministries 
• Fixed indemnity or supplemental policies 
• Dental or vision-only plans

Common Issues and FAQs

Can I use ICHRA funds for COBRA coverage?
Yes, if the COBRA coverage is ACA-compliant major medical insurance.

Can I get reimbursed for a family plan?
Yes, as long as the family plan meets ACA requirements and is enrolled in the exchange or individual market.

Does Medicaid qualify?
No, Medicaid is not reimbursable under ICHRA.

Actionable Steps

1. Check Plan Eligibility – Confirm that your plan meets ACA minimum essential coverage standards. 
2. Shop on Healthcare.com – Compare eligible plans. 
3. Keep Documentation – Save proof of premium payments for reimbursement. 
4. Verify with Employer – Employers may set rules on which expenses qualify beyond federal requirements.
   

Bottom Line

An ICHRA can be a flexible, tax-advantaged way to pay for your health insurance—but only if you choose the right kind of plan. Eligible plans include ACA-compliant marketplace coverage, Medicare, and certain student health plans. Ineligible options like short-term insurance or dental-only policies won’t qualify.