Three different ways to fund employee health coverage, each fitting a different kind of employer. Here's how they actually differ.
| Feature | ICHRA | QSEHRA | Traditional Group Plan |
|---|---|---|---|
| Employer size limit | None | Under 50 full-time employees | None (small vs. large group rules apply) |
| Federal contribution cap | None | Yes — IRS sets annual limits | N/A — employer selects plan(s) |
| Minimum participation requirement | None | None | Typically yes (often 70–75%) |
| Can vary contribution by employee class | Yes, by permitted classes | Limited (family status only) | Generally no — uniform within eligible group |
| Employee plan choice | Employee chooses individual market plan | Employee chooses individual market plan | Employer selects plan design(s) |
| Can be offered alongside a group plan | Only to different classes, not the same class | No — employer can't also offer a group plan | N/A |
| Cost predictability for employer | Fixed, budgetable per class | Fixed, budgetable, capped | Variable — driven by claims experience at renewal |
You're any size employer with a workforce that doesn't fit a uniform group plan — seasonal, multi-location, or a mix of full-time and part-time staff — and you want to set different contribution levels by employee class.
You have fewer than 50 full-time employees, don't want the administrative complexity of class design, and are comfortable with the IRS's annual contribution caps.
You have a large, relatively stable eligible workforce, want to select and manage plan design directly, and can absorb renewal-driven cost variability.