Do the reimbursements run through payroll?

No. Reimbursements are sent via ACH transfer directly from the employer’s bank account to the employee’s bank account — no payroll processing required.

That comes with a few key advantages:

• Less admin work for the employer

  Payroll deductions and direct-to-carrier payments are complex. (Some ICHRA administrators will require each employee to open a bank account for their allowance.) ACH transfers keep things simpler and easier to manage.

• More health plan options for employees

  Using ACH reimbursements allows employees to choose both on-exchange and off-exchange plans. (Traditional cafeteria plan setups through payroll are limited to only off-exchange plans.)

• Employees own their insurance relationship

  The employee pays the carrier directly, which helps reduce issues caused by payroll timing or payment delays. It also gives employees more control over their coverage.