Why not just give employees extra money in their paycheck instead of using ICHRA?

Great question — it seems simpler, but there’s a big difference.

When money is added to an employee’s paycheck, it’s treated as taxable income. That means both the employer and employee pay taxes on it — and there’s no guarantee it will be used for health insurance.

With an ICHRA, the money is tax-free and specifically set aside for health insurance. Employees get more value from every dollar, and employers can offer a true health benefit — not just extra pay.

In short: paycheck = taxable and flexible; ICHRA = tax-free and purpose-built for healthcare.