ICHRA vs. Group Health Plan for Architecture Firms in Novi, MI — Small Business Health Insurance 2026

Novi architecture firms can choose between ICHRA and group plans, both offering tax advantages for employer contributions.
ICHRA offers predictable costs for employers and individual plan choice for employees, often with no minimum participation.
Traditional group plans provide a unified network and simplified billing but may have minimum participation rules (e.g., 70%).
Tax treatment: ICHRA reimbursements and group plan premiums are generally tax-deductible for the firm and tax-free for employees (IRC §106).
In 2026, 5 carriers offer marketplace plans in Michigan Rating Area 2, which includes Oakland County where Novi is located.

Updated July 2026 · MichiganPlanFinder.com — Licensed Michigan Health Insurance Producer (NPN #21249133)

For architecture firms in Novi, Michigan, deciding on the best health insurance strategy for your team is a critical business decision. With a median income of $110,938 and a vibrant business community, Novi's architecture sector, like many professional services, faces the challenge of attracting and retaining top talent through competitive benefits. Whether you're considering the flexibility of an Individual Coverage Health Reimbursement Arrangement (ICHRA) or the traditional structure of a group health plan, understanding the nuances is key. Both options offer distinct advantages for firms operating in Oakland County, home to major healthcare systems like Ascension Providence Hospital, Southfield And Novi.

Get Your Free Health Insurance Quote

A licensed agent can compare coverage options for you at no cost.

✓

You're all set!

A licensed agent will reach out shortly.

Why Novi Architecture Firms Need a Strategic Benefits Approach Now

Novi, with its population of 66,224, is part of the broader Oakland County economic landscape, where the median income is $95,296. The demand for skilled architects and designers in this growing region means firms must differentiate themselves. Beyond salary, a robust health benefits package is often a deciding factor for potential hires and a key retention tool. The choice between an ICHRA and a traditional group plan isn't just about compliance; it's about aligning with your firm's culture, budget, and employee demographics. As part of Michigan Rating Area 2, which covers Macomb and Oakland counties, Novi firms have access to a competitive individual health insurance market for ICHRA, alongside various group plan options.

ICHRA vs. Group Plan: The Key Differences for Architecture Firms

The fundamental distinction between an ICHRA and a traditional group health plan lies in who owns the policy and how benefits are administered. Understanding these differences is crucial for Novi's architecture firm owners.

Comparison: ICHRA vs. Group Health Plan for Employers
Feature	Individual Coverage HRA (ICHRA)	Traditional Group Health Plan
Policy Ownership	Employees own their individual health policies.	Employer sponsors and owns the group policy.
Employer Cost	Fixed, predictable monthly allowance per employee.	Variable premiums based on plan choice, age, and health of the group.
Employee Choice	High flexibility; employees choose any ACA-compliant individual plan from the marketplace.	Limited to plans offered by the employer's chosen carrier(s).
Tax Treatment (Employer)	Reimbursements are tax-deductible.	Premiums are tax-deductible.
Tax Treatment (Employee)	Reimbursements are tax-free (for qualifying individual plans, IRC §106).	Employer-paid premiums are tax-free.
Administrative Burden	Lower; firm defines allowance, employees manage plan selection.	Higher; firm selects and manages plans, handles enrollment.
Participation Rules	No minimum participation required for employer contributions.	Often requires a minimum percentage of eligible employees (e.g., 70% or more).
Network Access	Employees choose plans with networks that suit their needs.	Entire group shares the same network(s) offered by the plan.

ICHRA: Empowering Employee Choice with Predictable Costs

An ICHRA allows your architecture firm to set a fixed, tax-free allowance for each employee. Employees then use this allowance to purchase an individual health insurance plan that best fits their personal and family needs. This approach shifts the burden of plan selection from the employer to the employee, while giving the firm predictable, budgetable costs. For employees, it means they can choose a plan with their preferred doctors and hospitals, such as those within the Beaumont Health system or Henry Ford Health West Bloomfield Hospital, which are accessible from Novi. This can be particularly appealing to a diverse workforce with varying healthcare priorities.

Traditional Group Health Plans: Unified Coverage and Simplicity

With a traditional group health plan, your architecture firm selects one or more plans from a carrier, and all eligible employees enroll in one of those options. The firm typically pays a portion of the premium, and employees contribute the rest. This offers a unified benefits package, which can simplify billing and administration from a carrier perspective. However, it often comes with minimum participation requirements, meaning a certain percentage of your eligible team must enroll for the plan to be offered. While less flexible for individual choice, it provides a consistent coverage experience across the team.

Step-by-Step: Choosing the Right Health Plan for Your Architecture Firm

Making an informed decision requires careful consideration of your firm's specific circumstances. Here's a practical guide for Novi architecture firm owners:

Assess Your Firm's Size and Employee Demographics:
- Small firms (under 50 employees): Both ICHRA and small group plans are viable. ICHRA might offer more flexibility if your team has diverse needs or if meeting group participation minimums is a challenge.
- Employee Age & Health: If your team is generally young and healthy, individual plans available through ICHRA might offer lower premiums. For an older team or those with complex health needs, a comprehensive group plan could be more cost-effective.
Evaluate Budget and Cost Predictability:
- ICHRA: Offers highly predictable costs, as you set a fixed reimbursement allowance. Any premium increases on individual plans are borne by the employee beyond that allowance.
- Group Plans: Premiums can fluctuate annually based on the group's utilization and market rates, making cost forecasting potentially more complex.
Consider Administrative Burden:
- ICHRA: Lower administrative burden for the employer once set up. Employees handle their own enrollment and plan management through HealthCare.gov.
- Group Plans: Requires more employer involvement in plan selection, enrollment, and ongoing administration.
Understand Tax Implications:
- Both options generally offer tax advantages. Consult with a tax professional to understand the specific benefits for your firm's structure in Michigan. Employer contributions to both types of plans are typically tax-deductible for the business and tax-free for the employees.
Review Michigan-Specific Rules and Carrier Options:
- Familiarize yourself with state regulations for both individual and group markets. Consider the confirmed local carriers available in Novi's Rating Area 2.

Michigan-Specific Rules and Oakland County Carrier Notes

Michigan operates on the federal marketplace, HealthCare.gov. In 2026, 5 carriers offer marketplace plans in Rating Area 2, which covers Macomb, Oakland counties. These carriers include Blue Care Network of Michigan, Blue Cross Blue Shield of Michigan, McLaren Health Plan Community, Priority Health, and United Healthcare. This robust selection provides ample choice for employees opting for individual plans through an ICHRA.

Michigan's marketplace offers EPO, HMO, and PPO plan structures, giving both individual and group plan shoppers a range of network and cost options. For firms considering a traditional group plan, these same carriers (and others operating solely in the small group market) will offer various options. It's important to note that while PPO plans are available, their specific availability and cost can vary. Michigan also expanded Medicaid in 2014 (Medicaid expansion (Healthy Michigan Plan)), meaning adults with income up to 138% of the Federal Poverty Level (FPL) qualify for Medicaid, which could impact individual plan choices for some employees if their income is low enough.

Oakland County, with its population of 1,272,294, boasts a comprehensive healthcare infrastructure. Major hospitals like Ascension Providence Hospital, Southfield And Novi, Trinity Health Oakland Hospital in Pontiac, and Beaumont Hospital Royal Oak ensure that residents have access to high-quality care. When employees choose individual plans via an ICHRA, they can select a plan that includes their preferred local providers and health systems, maintaining continuity of care.

Common Mistakes Architecture Firms Make When Choosing Benefits

Navigating the complex world of health insurance can lead to missteps for Novi's architecture firms. Avoiding these common errors can save time, money, and ensure employee satisfaction:

Underestimating Employee Diversity: Assuming all employees have similar healthcare needs. A young, single architect has different priorities than an older architect with a family. ICHRA's flexibility often addresses this better than a one-size-fits-all group plan.
Focusing Only on Premium Costs: While premiums are a major factor, firms sometimes overlook deductibles, out-of-pocket maximums, and network restrictions. A "cheap" plan with high out-of-pocket costs can lead to employee dissatisfaction.
Ignoring Tax Implications: Failing to fully leverage the tax advantages of either ICHRA or group plans. Both offer significant savings, but understanding the rules (e.g., IRC §106 for ICHRA reimbursements) is crucial for compliance and maximizing benefits.
Not Understanding Participation Rules: For group plans, not meeting minimum participation requirements can prevent a firm from offering the plan. For ICHRA, incorrectly assuming employees must enroll in a specific type of individual plan can cause issues.
Delaying the Decision: Health insurance decisions can be complex, but procrastination can leave employees without coverage or force rushed, suboptimal choices. Planning ahead, especially for open enrollment periods, is essential.
Failing to Communicate Benefits Clearly: Even the best plan won't be valued if employees don't understand how it works or how to use it. Clear communication about ICHRA allowances or group plan details is vital.

Frequently Asked Questions

What is an ICHRA and how does it work for architecture firms?

An Individual Coverage Health Reimbursement Arrangement (ICHRA) allows employers to reimburse employees for individual health insurance premiums and other qualified medical expenses. For architecture firms, this means the firm sets a tax-free allowance, and employees choose their own plans from the Michigan marketplace, like HealthCare.gov. This offers flexibility and predictable costs for the firm.

Are there tax advantages to offering an ICHRA or a group health plan?

Yes, both ICHRA and traditional group health plans offer significant tax advantages. ICHRA reimbursements are tax-deductible for the employer and tax-free for the employee (under IRC Section 106), provided the employee has qualifying individual health coverage. Group health plan premiums paid by an employer are also generally tax-deductible for the business and not considered taxable income for employees.

How do employee participation requirements differ between ICHRA and group plans?

Traditional group health plans often require a minimum percentage of eligible employees (e.g., 70% or more, depending on the carrier and state rules) to participate for the plan to be offered. ICHRA, on the other hand, typically has no minimum participation requirement for the employer contribution, as employees are enrolling in individual plans. This can be beneficial for smaller firms or those with diverse employee needs.

Can I offer an ICHRA to some employees and a group plan to others?

Yes, under specific rules, employers can offer an ICHRA to certain classes of employees (e.g., full-time, part-time, seasonal, employees in different geographic locations) while offering a traditional group plan to others. However, an employer cannot offer the same class of employees both an ICHRA and a traditional group health plan simultaneously. This flexibility can be useful for architecture firms with varied workforce structures.

What are the typical out-of-pocket costs for employees on individual plans in Novi?

Out-of-pocket costs on individual plans in Novi vary significantly by plan tier and carrier. Bronze plans typically have higher deductibles (e.g., $6,000-$9,000) and lower premiums, while Silver plans offer a balance with moderate deductibles (e.g., $3,000-$6,000) and lower out-of-pocket maximums. Gold plans have the lowest deductibles (e.g., $0-$2,000) but higher premiums. Employees can choose the tier that best suits their expected healthcare usage and budget.

Get Your Free Quote

Choosing between an ICHRA and a traditional group health plan for your Novi architecture firm involves complex considerations around cost, flexibility, and administrative effort. A licensed Michigan health insurance producer can provide personalized guidance, helping you compare detailed quotes, understand tax implications, and navigate state-specific regulations. Get a free, no-obligation quote today to find the best solution for your team.