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What Is the Difference Between a Funded and Notional ICHRA?

By May 19, 2022Employers, ICHRA
Not all ICHRAs are the same. The premier ICHRA powered by OneBridge Benefits, the YourWay Frontier ICHRA, is different from other, traditional ICHRAs in that Frontier is funded—not notional. This means employees use employer-contributed funds to obtain their own health insurance coverage, which they own directly. YourWay Frontier, as a funded ICHRA, provides a tax-advantaged retirement savings vehicle that employees own, even after they’re no longer employed, and empowers them to obtain tailor-fit coverage. And with a funded ICHRA, employer contributions are immediately made available for employees to use, meaning they can use pre-tax dollars to pay for their monthly insurance premiums. This added flexibility and additional tax savings not only differentiate YourWay Frontier as the premier ICHRA, but helps your business attract and retain top industry talent by offering them better-than-expected benefits.

By now, you probably know what an ICHRA is and how the YourWay Frontier ICHRA is similar to a 401(k).

But what you may not know is how our Frontier ICHRA product is different from most other ICHRAs.

The key difference is simple! 

Our ICHRA is funded—not notional

But what does that mean?

Well, funded ICHRAs are designed to allow employers to contribute funds into individual employee benefit accounts.

Employees then use those funds to obtain their own health insurance coverage, which they own directly. Unused balances in their Frontier accounts stay with the employee for use at any time—whether in one month, 10 years, or even after they retire or separate from their employer.

Notional ICHRAs, on the other hand, act more like stipends. Employers still determine contribution amounts, but only provide the employees with the exact amount spent. So, let’s say an employee is provided a $700 monthly contribution, and they purchase a Silver plan for $652.70 per month, the employer will reimburse the $652.70, but the employee doesn’t keep the difference for long-term savings.

Why does this matter, and how can a Funded ICHRA (like the YourWay Frontier) help your business?

Well, savings is the new compensation. The companies that are able to attract and retain their industry’s top talent understand the importance of turning an expected benefit, like group health insurance, into a true savings vehicle that employees own while also empowering them to choose the coverage that’s right for them. 

So instead of promising access to an insurance plan that not all employees value in the same way—with the YourWay Frontier ICHRA, employers provide actual pre-tax funds that can grow and be used in perpetuity, until exhausted, serving as an additional retirement benefit. 

So, before onboarding another ICHRA platform—or even renewing your previous group coverage, make sure you’re taking advantage of everything the YourWay funded Frontier ICHRA solution offers. 

Learn more today at, or set up a time to speak with a YourWay onboarding specialist.