Policy & incentives
ICHRA State Tax Credits & Employer Incentives
States are beginning to reward employers for adopting defined-contribution health benefits. Indiana enacted the first ICHRA and QSEHRA employer tax credit, and Ohio, Georgia, and Texas introduced their own incentive bills in 2025 (HRA Council, 2024–2025). Here''s a plain-English overview of the landscape — and why the underlying benefit is worthwhile with or without a credit. This is general information, not tax or legal advice.
By Joe Rosenblatt · Founder & ICHRA Broker, The ICHRA Broker
Key facts
- First state to enact
- Indiana (effective 2024)
- Indiana program size
- Up to $10 million per year statewide
- States with 2025 bills
- Ohio, Georgia, Texas
- Incentive type
- Employer tax credit for offering ICHRA/QSEHRA
- Federal status
- CHOICE Act codification under consideration
- Bottom line
- Credits are a bonus, not a requirement
Why states are incentivizing ICHRA
States have a stake in keeping their individual insurance markets healthy and their small businesses competitive. By encouraging employers to adopt ICHRA and QSEHRA, states move more people into locally regulated, ACA-compliant individual coverage — which can stabilize the risk pool and expand access without a state-funded program. That is why incentives are appearing on a bipartisan basis.
Indiana: the first ICHRA/QSEHRA tax credit
Indiana became the first state to establish a dedicated employer tax credit for adopting an ICHRA or QSEHRA, passed via House Bill 1004 and effective as of 2024. The program is structured to support small businesses, with up to $10 million per year in credits available statewide (HRA Council, 2024–2025). Employers should confirm current eligibility and amounts with the state and their tax advisor.
Ohio: HB 133
Ohio''s House Bill 133 would create an ICHRA tax credit for small businesses. It passed the Ohio House of Representatives with unanimous bipartisan support and, as of 2025, was awaiting action in the State Senate (HRA Council, 2024–2025).
Georgia: HB 341
Georgia''s House Bill 341 was introduced by bipartisan sponsors in the Georgia House of Representatives and, as of 2025, was pending legislative action (HRA Council, 2024–2025).
Texas: SB 1949
In Texas, Senate Bill 1949 was introduced in the Texas Senate in March 2025 and, as of that year, was pending legislative action (HRA Council, 2024–2025).
How an employer tax credit typically works
These programs generally let a qualifying employer offset part of its state tax liability for offering an ICHRA or QSEHRA, often tiered by contribution level or employer size. The specifics — eligibility, amounts, and how to claim — vary by state and can change as bills are amended, so treat any figures as a starting point to confirm with a tax professional.
The federal picture: the CHOICE Act
Alongside state action, Congress is considering codifying ICHRA in federal statute as the Custom Health Option and Individual Care Expense (CHOICE) arrangement. Codification would make ICHRA''s legal footing permanent and could bring its own incentives over time. For now, ICHRA is already fully valid under the 2019 federal rule.
What this means for your business
A state credit is a welcome bonus, but it is not the reason to offer an ICHRA. The core advantages — a fixed, tax-free budget, no participation minimums, and employee choice — stand on their own in every state. If your state has or adds a credit, it simply improves an already-attractive math.
Staying eligible and claiming a credit
Where a credit exists, claiming it usually means meeting the program''s eligibility rules, keeping documentation of the benefit you offered, and filing the appropriate state forms. Because these programs are new and evolving, work with a tax advisor who can confirm the current rules in your state before you count on a credit.
About this information
Legislation changes quickly. The bills and figures above reflect the state of play reported for 2024–2025 and may have advanced, stalled, or been amended since. Verify the current law in your state, and treat this page as general educational information, not tax or legal advice.
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In some states, yes. Indiana enacted the first employer tax credit for adopting an ICHRA or QSEHRA, and Ohio, Georgia, and Texas introduced incentive bills in 2025. Availability and amounts vary and change, so confirm your state''s current rules with a tax advisor.
Joe Rosenblatt — Founder & ICHRA Broker, The ICHRA Broker
Joe Rosenblatt is the founder of The ICHRA Broker, an independent ICHRA brokerage that helps small businesses offer tax-free health benefits without a group plan. He works directly with employers and their advisors on ICHRA and QSEHRA setup, plan design, and compliance.
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