Can you use a Section 125 premium-only plan (POP) with individual health insurance?

Generally, no. POPs are designed for employer-sponsored group health insurance premiums. However, employers can offer a POP alongside an ICHRA for employees who enroll in off-exchange individual health insurance plans.

What's the difference between a Section 125 plan and an HRA?

A Section 125 plan lets employees pay for qualified benefits with pre-tax salary reductions. An HRA is funded by the employer and provides tax-free employer contributions for eligible medical expenses and, in some cases, health insurance premiums.

Who should consider a Section 125 premium-only plan?

A POP is a good fit for employers that already offer group insurance and want employees to pay their share of premiums with pre-tax dollars. It’s also a great option for employers offering an ICHRA as long as employees enroll in off-exchange plans.

Can I pay the PCORI fee electronically?

Yes, you can pay the PCORI fee electronically. You can use the Electronic Federal Tax Payment System (EFTPS).

Do I owe a PCORI fee if I offer both an ICHRA and a group health plan?

Yes, you need to pay a PCORI fee if you offer an ICHRA. The PCORI fee for ICHRA is separate if the group plan is a fully-insured plan, as PCORI only applies to self-funded models. If you offer a self-funded plan alongside an ICHRA to different employees, and they share the same plan year, you can combine them for PCORI fee reporting purposes. Count the average number of participating employees and dependents for the self-funded plan plus the average number of participating ICHRA employees.

Is a QSEHRA worth it for small businesses?

For many small businesses, yes, a QSEHRA is worth it. A qualified small employer HRA (QSEHRA) offers a predictable way to provide health benefits without the cost and complexity of traditional group health insurance. Employers set a monthly allowance that fits their budget, while employees choose their preferred individual health insurance plan.

What are some potential drawbacks to consider when thinking about offering a QSEHRA?

The main potential downside to a QSEHRA is the IRS annual contribution limit. Unlike an individual coverage HRA (ICHRA), employers can't give employees more than the IRS-set maximum limit. QSEHRAs also have fewer customization options for varying employee contributions.

Can employees choose any health insurance plan with a QSEHRA?

Yes. Employees can generally purchase any ACA-compliant individual health insurance plan that best meets their needs through a local exchange, the federal Health Insurance Marketplace, a private insurer, or a licensed insurance broker. However, employees must have a health plan that provides minimum essential coverage (MEC) to participate in the QSEHRA.

Who is eligible to offer a QSEHRA?

A QSEHRA is available to employers with fewer than 50 full-time equivalent employees (FTEs). You can’t offer a traditional group health plan or group ancillary benefits alongside the QSEHRA. Employers must also comply with IRS rules regarding reimbursement limits and employee eligibility.

Can a QSEHRA reimburse more than individual insurance premiums?

Yes. Employers can design the benefit to allow employee reimbursements for health insurance premiums only or for premiums plus other IRS-qualified out-of-pocket medical expenses. This includes deductibles, copays, over-the-counter drugs, prescription medications, and other eligible expenses.

Can I administer a QSEHRA myself?

While employers can self-administer a QSEHRA, doing so can be time-consuming and risk compliance penalties. Many employers use an HRA administrator, like PeopleKeep, to automate plan documents, review reimbursement requests, maintain required records, and help ensure compliance with IRS and HIPAA requirements.

Does ICHRA help employees pay for individual health insurance coverage?

Yes. With an ICHRA, employees receive a tax-free employer contribution that they can use toward their individual health insurance premiums.

Do employees have to choose the same health insurance plan with ICHRA?

No. One of the biggest advantages of ICHRA is that employees can choose individual health insurance plans based on their own healthcare preferences, budget, and preferred providers.

Where can employees buy individual health insurance plans with ICHRA?

Employees can purchase individual health insurance plans through the Health Insurance Marketplace, a state marketplace, or directly from an insurance company. With ICHRA, employees may also have the option to choose off-exchange plans, which can provide additional plan choices depending on their location. With Remodel Health’s ICHRA+, most employees enroll in off-exchange plans through our platform.

What are the most popular health plan types chosen by Remodel Health ICHRA+ members?

Gold copay plans, bronze HSA plans, and silver copay plans make up the majority of selections.

Do employees with ICHRA tend to choose gold or bronze plans?

Gold and bronze plans are both popular choices among Remodel Health ICHRA+ members, with 28% choosing Gold copay plans and 27% choosing Bronze HSA plans.

An individual coverage health reimbursement arrangement (ICHRA) is an employer-sponsored benefit that allows organizations to provide tax-free contributions employees can use toward individual health insurance premiums and eligible medical expenses. Unlike traditional group health plans, ICHRA gives employees more flexibility to choose coverage that fits their needs.

Is ICHRA only for small employers?

No. Employers of all sizes use ICHRA to provide flexible health benefits.

Do employees have fewer health plan options with ICHRA?

No. ICHRA often gives employees access to a wider range of individual health plans. Instead of choosing from a limited number of employer-selected group plans, employees can compare available options and select healthcare coverage based on their providers, prescriptions, budget, and healthcare needs.

Chat With Us Today | Remodel Health

Health Benefits

Section 125 premium-only plan rules & regulations

July 24, 2026 at 8:00 AM 10 min read

Health Insurance

Form 720 and PCORI fee FAQs

July 8, 2026 at 1:15 PM 10 min read

QSEHRA

The QSEHRA: Pros and cons

July 7, 2026 at 4:15 PM 10 min read

ICHRA

Addressing the U.S. healthcare affordability crisis through ICHRA

Jul 27, 2026, 8:02:00 AM 7 min read

Individual Health Insurance

Most popular individual health insurance options with ICHRA

Jul 14, 2026, 9:00:00 AM 7 min read

ICHRA

6 common ICHRA misconceptions debunked

Jul 7, 2026, 9:30:00 AM 6 min read

Remodel Health is a financial technology company, not an FDIC insured depository institution. Banking services provided by Bangor Savings Bank, Member FDIC. FDIC insurance coverage protects against the failure of an FDIC insured depository institution. Pass through FDIC insurance coverage is subject to certain conditions. The Remodel Health Mastercard® Debit Card is issued by Bangor Savings Bank, Member FDIC, pursuant to license by Mastercard International Incorporated. Mastercard is a registered trademark, and the circle design is a trademark of Mastercard International Incorporated.

Interested in learning more?