ICHRA setup guide

Free setup documents

The notice and plan document are the practical starting point. Use the government's free model notice, then use Gabriel's fill-in-the-blanks template for the written plan document.

Can I use one?

An ICHRA is a worker benefit. There has to be a real job and a real employee. The tricky part is that business owners usually cannot pay themselves this way.

*The common fix: have one real W-2 employee in the business, such as a spouse, an adult child, or a hired worker who does a real job for real pay. That employee is the one the ICHRA pays back. A CPA can set this up cleanly.

Best setup for an owner-couple

Run the business as a C-corp and make both spouses real W-2 employees. In a C-corp, owners count as employees, so both of you can be reimbursed tax-free. The jobs and pay must be real, and a C-corp has its own taxes, so have a CPA check the math before relying on it.

A real example

Meet a married couple who both work in their own C-corp and draw income from another business too. They run their health setup through the C-corp's ICHRA. Both are on Gabriel Care Onyx.

Each month the company pays them back, tax-free, for:

• Their ACA health insurance premiums (about $400 each, $800 for the couple)
• The medical-care part of their Gabriel Care membership (the Clinical Care Component, $299 each, $598 for the couple)

That's $1,398 a month — about $16,776 a year — reimbursed tax-free.

What that saves them

• The C-corp deducts every dollar as a business expense, cutting its tax bill by roughly $3,500 a year (21% corporate rate).
• They receive it tax-free, so they skip the income tax they'd owe if they paid for all of it with personal take-home pay. To net $16,776 after tax, a couple would normally need to earn over $21,000 in gross salary first.
• Net result: a reliable swing of roughly $4,000–$5,000 a year in their favor, on money they were going to spend on health coverage anyway.

Only the medical-care part of Gabriel Care is reimbursable. The wellness-and-concierge part is not. Your monthly Gabriel statement splits this out for you automatically.

What you can reimburse by tier

Add your monthly ACA premium to your tier's Clinical Care Component. That combined number is what your ICHRA reimburses tax-free.

One thing to check first: this clearly wins when your income is high enough that you would not have qualified for a big ACA subsidy anyway. If your reported income is low enough to earn a large ACA discount, routing premiums through an ICHRA can cancel that discount — and the lost discount can be worth more than the tax savings. If that might be you, have a CPA model it both ways before you set it up. For most owners with a separate income source, the example above is the realistic outcome.

The 7 steps

1. Pick who gets the benefit.Find at least one real employee, meaning someone with a real job and a real paycheck.
2. Write down the plan.Create a short written ICHRA plan document. This is required by law.
3. Decide the monthly amount.Pick a set dollar amount the business will pay back each month, such as $600.
4. Tell the employee, in writing, early.Give them a written notice at least 90 days before the plan starts. New hires get it before they start.
5. Each person buys their own health plan.They sign up for their own individual insurance, such as an ACA marketplace plan, and keep the proof.
6. Show the receipts before getting paid back.Each month, collect proof that the insurance is active and the bill was really paid.
7. Pay it back and write it down.The business pays the money back, tax-free, and saves every record.

Watch the subsidy trade-off

If you take ICHRA money that counts as affordable, you usually cannot also get an ACA discount that month. For 2026, an offer is affordable if the employee's cost for the lowest-cost Silver plan, after your reimbursement, is under 9.96% of monthly household income.

What it can pay for

An ICHRA can generally reimburse your health insurance bill, which means the monthly premium. It can also reimburse real medical care such as doctor visits, labs, prescriptions, telehealth, and screenings. These are called Section 213(d) medical expenses.

About a care membership

A care membership, including Gabriel Care, can be paid back only for the part that is real medical care, such as clinical visits, telehealth, and labs. The part that is just nice-to-have wellness is not covered. Ask for an invoice that splits out the medical part from the rest.

Records to keep

If the IRS ever asks you to prove it, these are the papers that keep you safe. Keep them for at least 7 years.

• The signed written ICHRA plan document
• The dated 90-day notice you gave the employee
• Proof each person has their own insurance every month
• The insurance premium statements and proof you paid them
• Itemized invoices for any doctor care or membership, with the medical part split out
• A simple log: date, who, what, how much, and when it was paid back
• Proof of the payback, such as a payroll stub or bank record

Let AI organize it

Simple AI tools can help keep receipts, invoices, and proof of insurance organized. The goal is one clean folder per year, not a shoebox of paperwork.

Do I need a fancy platform?

No. For one or two people, a written plan document, the notice, and a tidy folder of receipts, even a spreadsheet, is enough. Paid platforms just automate this. They are helpful when you grow, but optional when you are small. The plan document and notice are never optional.

Important - Not Legal, Tax, or Insurance Advice

This guide is provided by Gabriel Care for general informational and educational purposes only, based on publicly available information as of June 26, 2026. It is not legal advice, tax advice, accounting advice, or insurance advice, and it does not create any advisory or fiduciary relationship. Gabriel Care and Gabriel Labs LLC are not a CPA, attorney, tax preparer, or licensed tax advisor, and assume no liability for any action taken in reliance on this material. Tax laws, IRS rules, and regulations change and vary by individual situation and by state. Before setting up an ICHRA, deciding who is an eligible owner or employee, or treating any payment as tax-deductible or as a qualified Section 213(d) medical expense, you must consult your own qualified CPA, tax advisor, ERISA/benefits attorney, and/or licensed insurance professional. Whether any specific membership or service can be reimbursed is determined by applicable law and your own advisors, not by this document.