ICHRA lets employers set a fixed monthly reimbursement, providing predictable costs. Employees buy individual health plans, with premiums insulated from high claims within a specific group since risk is spread across the larger individual market.

Level-funded plans also offer fixed monthly payments but can lead to higher premiums if a few employees have high claims. Employers may receive refunds if claims are low, offering potential savings over traditional group plans.

Combining a level-funded plan with an HRA offers a tax-efficient way to enhance employee benefits while keeping costs predictable. Employers cover claims, admin fees, and stop-loss insurance, while the HRA reimburses out-of-pocket costs like deductibles or specialty treatments. This approach manages high-deductible plans, providing more support for employees and controlling financial risk for employers.