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Modeling guide · 2026 and 2027

ICHRA contribution benchmarks are inputs—not a substitute for affordability modeling.

The federal rules impose no general minimum or maximum ICHRA allowance. The defensible contribution is the amount that works for the employer's actual employees, locations, ages, households, and benefit strategy.

Direct answer

There is no universal “average ICHRA contribution” that an employer can safely copy. Published provider averages can frame a range, but contribution design must be rebuilt against the workforce's real lowest-cost Silver premiums, ages, rating areas, employee classes, dependent strategy, and compensation objectives.

What the rules allow

An employer may generally choose the ICHRA allowance without a federal annual minimum or maximum. Amounts may vary by permitted employee class, age within the allowed 3:1 ratio, and number of dependents, while employees within the same class must generally receive the same terms. source

Freedom to choose an amount does not make every amount practical. A low allowance can leave employees with high residual premiums, make an offer unaffordable, affect premium-tax-credit eligibility, and create employer-mandate exposure for an applicable large employer.

How to use published contribution data

Provider research can show how customers in a particular book of business structure allowances. PeopleKeep, for example, publishes contribution analysis based on its own customer data; SureCo publishes research oriented toward large employers. These are useful directional datasets but not neutral national averages. source source

Correct useUse a published average to generate candidate contribution scenarios. Then test every scenario against the employee census and local premiums.
Incorrect useDo not quote a provider average as “the amount employers contribute” without naming the dataset, population, year, employer segment, and whether dependents were included.

A contribution-design model

  1. Build the census. Include age, home ZIP or rating area, employment class, dependent coverage assumptions, current enrollment, and expected eligibility dates.
  2. Price the reference coverage. Identify the self-only lowest-cost Silver plan for affordability and broader plan choices for competitiveness.
  3. Set employer objectives. Define budget ceiling, desired employee residual premium, dependent policy, recruiting target, and whether the plan must satisfy employer-mandate affordability.
  4. Model permitted variation. Test class, age, and dependent variations without exceeding legal constraints.
  5. Run employee-level outcomes. Calculate residual premium, affordability, potential premium-tax-credit interaction, and change from current employee cost.
  6. Stress test. Vary premiums, employee ages, geographic mix, enrollment, and workforce growth.
  7. Reconcile operations. Add platform fees, implementation expense, premium-payment or reimbursement timing, payroll effects, and exception handling.

Choose the correct plan year

The required contribution percentage is 10.22% for plan years beginning in 2027, compared with 9.96% for 2026. Read the 2027 guide or the 2026 guide for the applicable year. This article explains a modeling process; it is not a live calculator. source source

For plan years beginning in 2026, the required contribution percentage is 9.96%. Marketplace affordability is based on the employee's cost for self-only lowest-cost Silver coverage after the ICHRA amount, compared with household income under the governing formula. Employer-mandate analysis may use permitted safe harbors and requires specialized review. source source

The result can vary employee by employee because premium price varies with age and rating area. A single flat allowance may be affordable for one person and unaffordable for another.

What a live model should output

OutputWhy it mattersDecision
Employer annual costCombines allowance utilization, fees, implementation, and administrative assumptions.Budget viability
Employee residual premiumShows what each employee may still pay for reference and selected coverage.Employee impact
Affordability statusIdentifies employees requiring adjustment or employer-mandate review.Compliance design
Plan availability and networkReveals local areas where the individual market may not support the intended experience.Geographic fit
Group-plan comparisonNormalizes total employer and employee economics against the current or quoted group plan.Go/no-go

Bottom line

A credible contribution strategy is not “the industry average.” It is a reproducible employee-level model with visible assumptions, a plan-year-specific affordability calculation, local plan evidence, and a documented reason for every class or dependent variation.

Sources and evidence

1
HealthCare.gov — Individual Coverage Health Reimbursement ArrangementsFederal overview of ICHRA contributions, employee classes, class-size minimums, affordability, and implementation timing.Source reviewed 2026-09-11
 2
Internal Revenue Service — Revenue Procedure 2025-25Sets the required contribution percentage at 9.96% for plan years beginning in 2026.Source reviewed 2026-08-16
 3
Internal Revenue Service — Revenue Procedure 2026-26Section 3.02 sets the required contribution percentage at 10.22% for plan years beginning in 2027. Section 5 establishes the effective period.Source reviewed 2026-09-11
 4
PeopleKeep — PeopleKeep ICHRA contribution reportingProvider-customer dataset and contribution analysis. Useful as a directional benchmark, not a census of the full ICHRA market.Source reviewed 2026-08-16
 5
SureCo — 2026 State of ICHRA ReportVendor-sponsored research using surveys and behavioral data. Treat findings as directional and review the report methodology before relying on them.Source reviewed 2026-08-16

Review dates are recorded for each source above. Company pages are useful for confirming how a product is described, but they do not prove service quality or customer results.