Indiana ICHRA - Individual Coverage HRA for Employers

An ICHRA lets an Indiana employer skip the group plan entirely: instead of choosing one plan for everyone, you give each employee a tax-free monthly allowance to buy their own individual health plan. Indiana now sweetens the deal with a state tax credit for small employers that offer one.

What Is ICHRA

An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an IRS-approved way for an employer to reimburse employees, tax-free, for individual health insurance they buy themselves. The employer controls the budget; the employee controls the plan choice. There is no group premium and no annual group renewal.

How ICHRA Works in Indiana

• Set the allowance: choose a monthly dollar amount, and vary it by class of employee if you want (full-time, part-time, salaried, hourly).
• Employees shop: each employee buys an individual plan - Ambetter from MHS covers all 92 Indiana counties, and other carriers are available.
• They get reimbursed: employees submit proof of coverage and are reimbursed tax-free up to their allowance.
• You stay compliant: an administrator such as Take Command handles substantiation and reporting.

Indiana ICHRA State Tax Credit

Beginning in 2024, Indiana offers small employers - those with fewer than 50 full-time employees - a state tax credit of up to $400 per employee in the first year and up to $200 per employee in the second year for offering an HRA such as an ICHRA. That credit stacks on top of the federal tax advantages, which makes Indiana one of the more attractive states for the ICHRA model.

ICHRA vs Traditional Group

Best Fit and Ambetter

ICHRA fits Indiana employers who want predictable cost and employee choice over a one-size group plan - including businesses with remote or geographically spread teams. See how the marketplace side works on our Ambetter from MHS page.