Self-Employed ICHRA Savings Calculator
As a self-employed professional, you juggle every cost personally — including health insurance. An Individual Coverage Health Reimbursement Arrangement (ICHRA) may let you reimburse your own premiums and qualified medical expenses tax-free, potentially saving you thousands each year. Use the questions below to see if an ICHRA could work for you.
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How Much Can a Self-Employed Professional Save with an ICHRA?
If you’re self-employed and paying for your own health insurance, you’re likely spending between $500 and $1,500+ per month on individual coverage. An ICHRA lets your business — even a business of one — reimburse you for those premiums and qualified medical expenses tax-free. That means your business deducts the reimbursement, and you don’t owe income or payroll taxes on it.
Typical annual savings range from $2,000 to $8,000+, depending on your plan, income level, and state. For a self-employed professional in Nebraska earning $80,000/year with a $1,000/month premium, the tax-free reimbursement could save roughly $3,000–$4,000 annually compared to paying with after-tax dollars.
Savings examples are for illustrative purposes only. Actual savings depend on individual circumstances, plan selection, income level, and state tax rules. Consult a tax professional regarding your specific situation.
Is an ICHRA Right for a Self-Employed Business of One?
Yes — that’s one of the strongest use cases. Unlike QSEHRA (Qualified Small Employer HRA), which is limited to employers with fewer than 50 full-time employees, ICHRA has no employee count cap. A sole proprietor, freelancer, or single-member LLC can set one up.
Here’s what makes it work:
- Your business reimburses you (the employee) for individual health insurance premiums
- You choose your own plan on the individual market — no group plan required
- Reimbursements are tax-deductible for the business and tax-free to you
- You can cover your spouse and dependents as well
- There’s no annual limit on reimbursements (unlike QSEHRA’s caps)
The key requirement: you must be a common-law employee of your business. For sole proprietors, single-member LLCs, and S-corp owners who take a reasonable salary, this is generally straightforward. Eligibility depends on business structure and IRS classification — consult a tax professional for guidance specific to your situation.
What Expenses Does an ICHRA Cover for Self-Employed Individuals?
An ICHRA can reimburse a wide range of IRS-approved medical expenses under Section 213(d). For self-employed professionals, the most common include:
- Health insurance premiums — individual market plans, dental, and vision
- Prescription medications — copays, coinsurance, and qualifying prescriptions
- Doctor visit copays and coinsurance
- Mental health services — therapy, counseling, psychiatric care
- Lab work and diagnostic testing
- Durable medical equipment — glucose monitors, braces, CPAP supplies
- COBRA premiums (during transition periods)
What it doesn’t cover: Cosmetic procedures, general wellness supplements, or expenses already covered by another plan. The IRS publishes a full list of qualified medical expenses.
This list is illustrative, not exhaustive. Eligible expenses are governed by IRS Section 213(d) for the applicable tax year — consult current IRS guidelines or a tax professional to confirm eligibility.
How Does an ICHRA Compare to the Health Insurance Tax Deduction for Self-Employed Professionals?
Self-employed individuals can already deduct health insurance premiums on their personal tax return (the “self-employed health insurance deduction”). An ICHRA can work alongside this deduction — or replace it — depending on your situation.
| Factor | Self-Employed Deduction | ICHRA |
|---|---|---|
| Who reimburses | You (via tax return) | Your business (monthly) |
| Timing | End-of-year deduction | Ongoing reimbursement |
| Qualified expenses | Premiums only | Premiums + Section 213(d) expenses |
| FICA savings | No | Yes — reimbursements are exempt from FICA |
| Income limits | Cannot exceed net self-employment income | No income limit |
| Spouse/dependents | Limited rules | Can cover family |
For many self-employed professionals, an ICHRA provides broader coverage (not just premiums) and FICA tax savings that the standard deduction doesn’t offer. The right choice depends on your business structure, income, and family situation.
Can I Set Up an ICHRA If I’m Already on a Marketplace (ACA) Plan?
Yes. If you purchased your health insurance through the Health Insurance Marketplace (healthcare.gov), you may be eligible for an ICHRA reimbursement — but there are important rules:
- If your employer (your own business) offers an ICHRA, you cannot also receive Premium Tax Credits (subsidies) for the same coverage
- The ICHRA must be considered “affordable” under ACA rules — if it’s not, you may still qualify for marketplace subsidies
- You can opt out of the ICHRA if marketplace subsidies make your net cost lower
A Trek advisor can help you run the numbers to determine whether ICHRA or marketplace subsidies — or a combination — gives you the best outcome.
How Do I Get Started with an ICHRA as a Self-Employed Professional?
Getting started is straightforward:
- Talk to a Trek ICHRA specialist — we’ll review your business structure, current coverage, and goals
- Choose your reimbursement amounts — set monthly allowances for yourself (and employees, if applicable)
- Select your individual health plan — pick any plan on the individual market that works for you
- Submit expenses for reimbursement — premiums, prescriptions, and qualified medical costs
- Enjoy tax-free savings — your business deducts the reimbursement; you pay no income or FICA taxes on it
The entire setup typically takes less than a week, and there are no minimum participation requirements for a business of one.
Call 888-960-0442 — Start Your ICHRA Review
What Our Clients Say
“I’ve been self-employed for 12 years and never knew I could set up an HRA for just myself. Trek walked me through it, and I’m saving over $3,600 a year on my health insurance — tax-free.” — Self-employed consultant, Omaha, NE
“The process was simple. I was skeptical about a ‘business of one’ qualifying, but Trek made it seamless. My monthly health costs dropped immediately.” — Freelance designer, Austin, TX
Individual results vary. Testimonials reflect individual experiences and may not represent every client’s outcome.
About Trek Insurance Solutions
Trek Insurance Solutions is an independent insurance agency helping self-employed professionals, families, and businesses navigate health insurance, Medicare, life insurance, retirement planning, and employee benefits. We are licensed in 19 states: Nebraska, South Dakota, Iowa, Illinois, Wisconsin, Texas, Tennessee, Arizona, Arkansas, Indiana, Ohio, Michigan, Virginia, Kansas, Missouri, New Mexico, South Carolina, Georgia, and Florida.
Our ICHRA specialists understand the unique needs of self-employed professionals — from sole proprietors to small LLCs. We’ll help you find the structure that maximizes your tax savings and covers the healthcare costs that matter to you.
Contact us:
- Phone: 888-960-0442
- Online: trekis.net/contact
- Address: 16924 Frances St, Suite 203, Omaha, NE 68130