Three questions sort the field.
Are you keeping a group health plan for anyone?
If not, you're choosing between a QSEHRA and an ICHRA. If you are, look at an excepted-benefit or integrated HRA beside it, or an ICHRA for a different class of employees.
Are you under 50, counting full-time equivalents?
A QSEHRA is only for employers that aren't applicable large employers. An ICHRA works at any size, but at 50 or more it also needs an affordability review. Check your count with our FTE calculator.
Will anyone contribute to an HSA?
A general-purpose HRA can shut off HSA contributions. For HSA users, look at a limited-purpose, post-deductible or premium-only design.
What each arrangement is for, and where it stops.
QSEHRA
A first benefit for a small employer with no group plan.
Only for employers under 50 that offer no group health plan, and for this test a group health plan includes stand-alone group dental, group vision or a health FSA. For 2026 the caps are $6,450 self-only and $13,100 family, and amounts can vary by age and family size based on individual-market prices. Part-time and seasonal staff, among others, can be left out. Employees need minimum essential coverage for reimbursements to stay tax-free.
ICHRA
A set allowance toward individual plans, at any size.
Employees buy individual coverage on Washington Healthplanfinder or off the exchange, and you reimburse up to the allowance, with no federal cap. Allowances can vary by class and, inside a class, by age up to 3 to 1. Class design and the employee cost test are on our ICHRA page.
Excepted-benefit HRA
A capped add-on beside a group plan.
You have to offer the group plan, but employees don't have to join it to use the EBHRA. For a plan year that starts in 2026, the cap on newly available money is $2,200 per participant. It can't pay individual major-medical premiums, so it isn't a way out of group coverage. More on our EBHRA page.
Integrated HRA
Deductible support inside your group plan.
Tied to qualifying group medical coverage, it reimburses eligible expenses alongside the plan on terms you write, within the integration rules. It isn't a way to fund individual premiums.
HSA pairing
When the medical plan is HSA-qualified.
The HSA belongs to the employee and needs HSA-eligible coverage; the 2027 limits are $4,500 self-only and $9,000 family. A premium-only ICHRA may work alongside HSA contributions when the other HSA rules are met. The account-by-account checklist is on our HRA, HSA and pre-tax page.
When an HRA earns a look, and when group still wins.
Model an HRA when
Your people live across several of Washington's nine rating areas, the group renewal has outgrown what you can fund, or you'd rather set a fixed dollar budget per class than absorb a percentage of a premium you don't control.
Keep the group plan when
Most of the team relies on providers that local individual plans leave out, net premiums would rise for older employees or families, or one shared plan with one enrollment matters more to you than a fixed budget.
Two budgets, side by side: yours and theirs.
Your side is easy to cap. Illustrative: 15 eligible employees at a $450 monthly allowance is an $81,000 annual ceiling before administration fees. Real spending depends on claims, but don't plan around people leaving money unused.
Their side decides whether the change works. For each employee, compare today's contribution with the premium for a plan they'd actually pick, minus the allowance. An HRA offer can shrink or end premium tax credits, and ICHRA and QSEHRA treat credits differently, so test households, not averages. Our ICHRA and QSEHRA cost test walks through the method.
Then the practical checks: one carrier can run different networks for its individual and group plans, employees may pay a premium before the reimbursement lands, and an unused allowance isn't automatically paid out.
Pick up where your answer points.
ICHRA
Class design and the employee cost test, before anyone leaves a group plan.
Read the ICHRA guide →Excepted-benefit HRA
When a capped allowance next to your group plan closes a real gap.
Read the EBHRA guide →HRA, HSA and pre-tax plans
A Section 125, HSA and FSA design checklist that keeps payroll and plan documents in step.
See the checklist →Work backward from the notice date.
Model early
Run the census against your group renewal and individual-market prices while there's still time to change course.
Decide the design
Arrangement, classes, allowance, covered expenses and administrator, with payroll and your tax adviser in the room.
Send the notice
QSEHRA and ICHRA notices go out in writing no later than 90 days before the plan year starts. An ICHRA has different timing for some newly eligible employees.
Time the transition
Confirm enrollment windows and effective dates before ending a group plan. A badly timed midyear switch can restart deductibles and leave gaps.
Review each year
Premiums move every year, so re-run the employee math before each plan year.
What employers ask before they pick.
We have 46 employees and we're hiring. Is a QSEHRA a dead end?
It might be. A QSEHRA only works while you aren't an applicable large employer, so averaging 50 or more full-time employees plus FTEs takes it off the table. An ICHRA works at any size, which makes it the one to model if growth is likely.
Can we keep our group dental plan and add a QSEHRA?
No. For QSEHRA purposes, stand-alone group dental, group vision and a health FSA all count as a group health plan. If dental matters, model an ICHRA and have the administrator confirm the design.
Can part of the team get an HRA while the rest stays on the group plan?
With an ICHRA, yes, by permitted class, such as salaried and hourly, and with minimum class sizes when both offers exist. People in one class can't choose between the two, and classes follow job terms, never health or claims.
What does an HRA administrator handle?
Plan documents and notices, coverage and expense verification, approved reimbursements and, for an ICHRA, the opt-out process. Handing those tasks off doesn't hand off your responsibilities as the employer.
Where these rules come from.
Sources: HealthCare.gov: HRA options, HealthCare.gov: QSEHRA, HealthCare.gov: individual coverage HRA, IRS: HRA regulations, IRS Publication 15-B, IRS: premium tax credit Q&A and Washington Health Benefit Exchange: HRAs and tax credits. General information, not legal or tax advice.
Find out which HRA your census points to.
Send ages, ZIP codes and current contributions. We'll model the arrangements that fit and show the employee side of the math, with no obligation. We work with Washington employers from 5 to 500 employees, in person around Puget Sound and by phone or video statewide.