When an ICHRA conversation reaches the CFO, the questions change. HR asks about networks and employee experience. Finance asks about cost, predictability, tax treatment, and risk. If you can answer those four clearly, you'll get a fair hearing. If you can't, the conversation usually ends with "let's just renew."
Here's a framework built around the questions CFOs actually ask.
1. "What will this cost us?"
With a group plan, the cost is the premium (or, for a level-funded or self-funded plan, expected claims plus fixed costs) multiplied by enrollment, minus employee contributions. The employer doesn't know next year's number until renewal.
With an ICHRA, the employer sets the maximum monthly allowance per employee, by class, and the maximum cost is the allowance multiplied by eligible employees. Actual cost can be lower, because employees who choose cheaper plans or waive (for example, because they're covered by a spouse) only get reimbursed for what they spend, up to the allowance.
Bring a side-by-side. Show the current group cost, the renewal, and an ICHRA scenario with allowances set near the employer's current contribution. Showing the same budget delivered two ways is more persuasive than pitching savings.
2. "How predictable is it?"
This is usually ICHRA's strongest argument with finance:
- The employer controls the increase. If individual market premiums rise, the employer decides whether, and by how much, to raise allowances. A group renewal arrives as a number to accept or shop.
- No claims risk. The employer isn't exposed to a large claimant driving a renewal spike, as can happen with experience-rated or level-funded plans.
- No participation requirements. Small-group carriers typically require minimum participation. ICHRA doesn't.
Be honest about the other side. Predictability for the employer can mean volatility for employees. KFF's review of proposed 2026 Marketplace rates found a median requested increase of 18%, and enhanced premium tax credits are scheduled to expire at the end of 2025. Employees whose allowance doesn't keep up will feel that directly. Final 2026 premiums are now visible on HealthCare.gov, where open enrollment runs from November 1, 2025, through January 15, 2026, so you can price scenarios with actual rates.
3. "What's the tax treatment?"
Simple version for a CFO:
- Employer: ICHRA reimbursements are deductible as a business expense, like group premiums.
- Employee: reimbursements are excluded from income and from payroll taxes, like employer-paid group premiums.
- Employee share: if the premium is more than the allowance, employees can pay the difference pre-tax through a cafeteria plan, but only for coverage purchased off the Exchange. Exchange premiums can't be paid through a cafeteria plan under current law.
There's no new tax benefit in moving from group coverage to an ICHRA. The value is in cost control and flexibility, not tax arbitrage.
4. "What's the compliance risk?"
For an applicable large employer (50 or more full-time employees, including equivalents), the main risk is the employer shared responsibility payment:
- 2026 "A" penalty: $3,340 per full-time employee (minus 30) if the employer fails to offer coverage to at least 95% of full-time employees.
- 2026 "B" penalty: $5,010 for each full-time employee who receives a premium tax credit because the offer wasn't affordable.
An ICHRA counts as an offer of coverage. To avoid the B penalty, the allowance must be large enough that the employee's cost for the lowest-cost silver plan, minus the allowance, is no more than 9.96% of income for 2026 plan years (using one of the IRS safe harbors). That math has to be run for every employee, because premiums vary by age and location.
Smaller employers don't face that penalty, but affordability still determines whether employees can turn the ICHRA down and claim a premium tax credit instead.
Other obligations to mention: plan documents, a written notice at least 90 days before the plan year starts, substantiation of coverage, ACA reporting on Form 1095-C for ALEs, and the annual PCORI fee.
5. "Who does this work for, and who doesn't it?"
ICHRA tends to fit:
- Employers with employees in multiple states or rating areas
- Small employers that don't offer coverage today, or that face participation problems
- Employers with seasonal, part-time, or hourly classes that are hard to cover with one group plan
- Employers whose renewals have become unpredictable
Group coverage tends to fit better when:
- Individual market options in the employees' counties are limited or have narrow networks
- The workforce is older and concentrated in a high-premium area, so affordable allowances would cost more than the group plan
- Leadership values a single, uniform plan for recruiting
6. "What would a transition look like?"
Options to lay out:
- Full move to ICHRA at the next plan year.
- Hybrid by class, for example group coverage for full-time salaried employees and ICHRA for hourly employees (minimum class size rules apply).
- New-hire transition, where only employees hired after a set date get the ICHRA.
Close with a recommendation, not a pitch
CFOs respect a broker who tells them when the numbers don't work. Run the scenario, show where ICHRA wins and where it doesn't, and recommend the option that fits the client's budget and workforce. Sometimes that's ICHRA. Sometimes it's a better-negotiated group renewal. Either way, the client sees that you looked at the full picture.