ICHRA in New York 2026: NYC Wins, Six Counties Don't

Does ICHRA beat small group in New York?

In most of the state, yes, including its biggest county by population. An ICHRA (Individual Coverage Health Reimbursement Arrangement) clears our $100-a-month-per-employee qualifying bar in an estimated 41 of New York's 62 counties for the 2026 plan year, based on a county-by-county comparison of individual-market and small-group benchmark premiums. Those 41 counties make up about 3% of the 1309 counties nationwide where the math currently favors ICHRA, and cover an estimated 85% of New York's population.

If you haven't worked through the general decision yet, our ICHRA vs. small group decision guide walks through the framework this article applies specifically to New York. Here's what a simple "New York qualifies" headline hides: in most states we've covered on this site, the biggest metro is the weak link, the county where the individual-market discount thins out or disappears entirely. New York runs the other way. Kings County (Brooklyn), Queens County, New York County (Manhattan), the Bronx, and Staten Island all clear an estimated 22.7%, and Nassau and Suffolk Counties on Long Island clear 20.9%. The state's rural fringe, not its largest city, is where the case gets thin.

Why New York prices health insurance differently

Most states let individual-market insurers price a plan lower for a healthy 27-year-old than for a 55-year-old, and price small-group plans on a blended, composite basis for the whole group. New York doesn't allow either kind of underwriting. Under New York Insurance Law § 3231, "no individual health insurance policy and no group health insurance policy covering between one and fifty employees... or between one and one hundred employees... shall be issued in this state unless such policy is community rated," meaning every enrollee in a given policy form pays the same premium, "without regard to age, sex, health status, tobacco usage or occupation." New York has required this since 1993, years before the ACA made a weaker version of community rating a national baseline.

On top of that state law, both the individual and small-group markets are split into eight CMS-defined geographic rating areas that group New York's 62 counties into regions rather than pricing each county on its own. Rating Area 4, the New York City region, covers Queens, Richmond, Rockland, New York, Kings, Bronx, and Westchester Counties. Rating Area 3 covers Delaware, Dutchess, Orange, Putnam, Sullivan, and Ulster. That's why, in the data below, entire clusters of counties post the identical individual-market benchmark premium: they're the same rating area, priced once.

New York's insurance regulator, the Department of Financial Services (DFS), also runs one of the country's more active prior-approval processes. For the 2026 plan year, DFS's own August 29, 2025 announcement states that the agency "reduced insurers' requested rates 47.4%" in the individual market and "reduced insurers' requested rates 45.8%" in the small-group market, a combined $959 million held back from what carriers originally filed for, split roughly $148.2 million in the individual market and $810.8 million in small group. DFS also capped insurers' built-in profit provision at 1.0% for 2026. None of that changes the underlying spread between individual and small-group premiums that this article is about, but it does mean New York's regulator is actively narrowing both markets' increases before this dataset's benchmark premiums are ever set.

New York's eight rating areas, side by side

Because both markets price by CMS-defined geographic rating area rather than by individual county, the fastest way to understand New York's ICHRA math is to look at all eight regions at once. Each row below uses a representative county from that region; every other county sharing the same rating area posts the identical individual-market benchmark premium, and in most areas the identical small-group benchmark and savings percentage too.

Two of the eight, Area 3 (Mid-Hudson) and Area 4 (New York City), sit at the top of the state's range, while Area 2 (Western New York) sits at the bottom. Not every county inside a region matches its neighbors exactly, and the six no-edge counties sit inside Area 1, Area 6, and Area 7 rather than forming a rating area of their own; the next section breaks out those exceptions by name.

All 62 counties, three tiers

New York has 62 counties (the five New York City boroughs are each their own county), and this dataset sorts them into three groups for 2026: 41 that clear the $100-a-month qualifying bar, 15 that show a smaller, real discount but fall short of it, and 6 that show no individual-market cost edge over small group at all. Savings across the 41 qualifying counties run from 13.5% up to 26.2%, averaging 19.3%.

Look at that table closely: eight of New York's ten most populous counties qualify, and the only two large counties missing from it, Erie (Buffalo) and Monroe (Rochester), fall into the thin-margin tier rather than the no-edge one. That's the opposite pattern from most states this site tracks, where a big, competitively priced metro individual market is usually the reason a large county falls short. New York's biggest counties by population are, on this measure, its strongest ICHRA counties.

Erie County's 7.4% and Monroe County's similarly thin figure aren't weak because those metros are unusually cheap on the individual side; Rating Area 2 (Western New York) and Rating Area 5 (Finger Lakes) simply carry a smaller gap between their individual and small-group benchmarks than Rating Areas 1, 3, 4, and 8 do. A Buffalo-based employer shouldn't read a low headline percentage as "ICHRA doesn't work here." A 7.4% spread is still a real, positive number worth about $562 a year per employee; it's simply a thinner case than a Brooklyn or Poughkeepsie-based employer would see, and worth weighing against the administrative cost of running the plan correctly for a small group.

See the full New York savings breakdown for every qualifying county, or the national savings map to check a specific county by name.

Why New York City clears the bar

New York County's 2026 individual-market benchmark runs $807 a month against a small-group benchmark of $1,043, a gap of $236, or 22.7%, worth about $2,836 a year per employee. Kings, Queens, Bronx, and Richmond Counties, plus Westchester, post the exact same figures, because all seven sit in CMS Rating Area 4. That uniformity is the tell: it isn't that Manhattan specifically has cheap individual insurance, it's that the whole New York City rating region prices small-group coverage high enough, relative to its own individual-market benchmark, to clear our bar.

Nassau and Suffolk Counties, Long Island's Rating Area 8, clear a narrower 20.9%, still worth $2,717 a year per employee. Our sister article on how rating areas create identical premiums across different counties walks through the general mechanism in more depth, using Ohio as the example; New York applies the same CMS rating-area structure, layered under its own state community-rating law.

A worked example: Manhattan versus Tompkins County

Here's what the county-level math actually looks like for a small employer with a split New York workforce. Assume a 20-employee company with 12 employees in New York County (Manhattan) and 8 employees in Tompkins County (Ithaca).

Notice what this example does not do: claim a single statewide "New York saves X%" figure. A headline like that would blur the fact that an employer whose team sits mostly in Tompkins, Clinton, Herkimer, Montgomery, Otsego, or Schoharie County is looking at a very different answer than one whose team sits in any of the five boroughs. Checking counties individually, not trusting a state average, is the entire argument for county-level data.

The affordability test, in plain numbers

Every ICHRA has to clear the IRS's affordability test to avoid pushing an eligible employee's premium tax credit decision the wrong way. Under IRS Revenue Procedure 2025-25, the required contribution percentage for plan years beginning in 2026 is 9.96% of household income. In plain terms: an employer's ICHRA is considered affordable for an employee if that employee's own required monthly contribution toward the lowest-cost silver plan in their rating area doesn't exceed 9.96% of their household income, divided by 12.

The subsidy trade-off, stated plainly

Taking an ICHRA is not free money layered on top of a marketplace subsidy. Per HealthCare.gov's own guidance on individual coverage HRAs: if an employer's offer is considered affordable, the employee and their household members "won't be eligible for the premium tax credit on Marketplace coverage, even if they don't use the Health Reimbursement Arrangement." If the offer isn't considered affordable, the employee can choose between the ICHRA and the premium tax credit, "but not both": to get the premium tax credit, they have to decline the ICHRA offer entirely. New York runs its own exchange, NY State of Health, rather than HealthCare.gov, but the underlying federal rule about the ICHRA-versus-tax-credit choice is identical.

That distinction between "offer exists" and "offer is affordable" is where most of the real employee confusion shows up. An employer that sets a modest ICHRA contribution, one that doesn't cover most of the benchmark premium, may end up with an offer the IRS test still treats as unaffordable for lower-income employees, in which case those employees keep the option to shop NY State of Health with a premium tax credit instead of using the ICHRA at all. A higher-income employee at the same company, whose required contribution share is a smaller fraction of income, might see the identical offer treated as affordable, and lose access to the credit. The same ICHRA design can land differently for two employees in the same office, which is exactly why the affordability math has to run per employee, not once for the whole company.

How ICHRA Savings helps

None of the county math above requires talking to anyone. The savings map lets you look up every New York county by name and see the same individual-market and small-group benchmark premiums used in this article, so you can check whether your specific workforce sits inside a strong-margin county like Dutchess or Kings, a thin-margin one like Erie, or one of the six that don't clear the bar at all, before you spend time on anything else. Beyond the map, we help employers design and set up an ICHRA: building employee classes correctly, modeling affordability against your real census instead of a rule of thumb, and getting the required employee notice right and on time. We don't pick your employees' plans for them; that decision, and the choice of network, stays with each person buying their own coverage. Our part is the budget, the design, and the compliance scaffolding around it.

Before anything else, check whether your county is one where this works well: https://ichrasavings.com/ichra-savings-map/. Ten minutes there tells you whether the rest of this process is worth starting, and whether your county lands closer to Dutchess's 26.2% or Tompkins's no-edge result.

One more wrinkle worth flagging for New York specifically: a remote or multi-office employer with staff split across, say, Manhattan and the Hudson Valley isn't looking at one number. Each rating area prices differently, and an employee working from a Capital Region home office three days a week has a different county of record than one commuting into a Manhattan headquarters daily. Pull each employee's actual county, not the company's mailing address, before modeling a rollout.

This also changes how you think about employee classes. Under the federal ICHRA rule, a "rating area" is itself one of the eleven permitted class-defining factors, alongside full-time versus part-time status, salaried versus hourly work, and a few others. A New York employer with real headcount split between, say, the New York City rating area and the Mid- Hudson rating area could, in principle, define separate classes along those lines and set a different contribution for each, so long as each class meets the minimum-size rule and the same class isn't offered a choice between ICHRA and group coverage. Most small employers don't need to go that far. A single contribution amount applied evenly across the whole company is simpler to administer and still lets each employee shop the plan that fits their own county and household, since the ICHRA dollar amount, not the plan itself, is what varies by class.

Setting up an ICHRA in New York

New York doesn't add state-specific ICHRA design rules on top of the federal framework, but it does add its own market rules that shape what employees are actually buying with their allowance. The setup sequence itself is the same one that applies in any state:

1. Pull your census by county, not by office address. A company headquartered in Manhattan with field or remote staff in the Capital Region or western New York has a materially different savings story per location.
2. Check each employee's county on the savings map. Don't assume a statewide average applies; a 26.2% county and a no-edge county both technically sit in "New York," but they aren't the same decision.
3. Model affordability using the 2026 threshold. At 9.96% of household income, the required contribution percentage sets how much an ICHRA contribution needs to cover to count as affordable.
4. Define employee classes carefully, if you use them. An employee class is a group defined by an objective factor the IRS permits, such as full-time versus part-time status, geographic location, or salaried versus hourly work. Class rules carry minimum-size requirements and cannot offer the same class a choice between ICHRA and group coverage.
5. Send the required notice on time. Under 26 CFR § 54.9802-4(c)(6), eligible employees generally need written notice at least 90 calendar days before the plan year begins, with specific required content about the offer and its effect on subsidy eligibility.
6. Point employees to NY State of Health, not HealthCare.gov. New York runs its own ACA marketplace exchange; employees shopping for individual coverage to pair with an ICHRA allowance need to know that up front.

See our full ICHRA setup timeline for the detailed rollout plan, including the exact notice content requirements, and our guide to ICHRA employee classes if your New York workforce spans more than one rating area.

The honest limits of this data

How these numbers are calculated

Every county figure in this article comes from the same dataset that powers our savings map, not from a survey or a sales estimate. For each of New York's 62 counties, we compare a 2026 individual-market benchmark premium, the second-lowest-cost silver plan available to a representative enrollee, against a small-group benchmark premium built from comparable small-group plan filings for that county's rating area. A county "qualifies" for its own page when the gap between those two benchmarks reaches at least $100 a month per employee; 41 of New York's 62 counties clear that bar for 2026. Another 15 show a smaller, positive gap that falls short of it. The remaining 6 aren't in the underlying dataset at all, meaning the individual-market benchmark in those counties doesn't run below the small-group benchmark for 2026. New York's total county count comes from the U.S. Census Bureau's 2020 county reference file; the state's 2024 population estimate, used to calculate the population share of qualifying counties, comes from the Census Bureau's Population Estimates Program.

Three limitations are worth stating plainly. First, benchmark premiums are built around a representative enrollee profile; because New York community-rates by law, this matters less here than in most states, since age doesn't move the individual-market premium the way it does elsewhere, but household composition and plan choice still do. Second, these are benchmark plans, not every plan on the market; an employee who chooses a richer or leaner plan than the benchmark will see a different premium, though the relative spread tends to hold directionally. Third, rates are filed and refreshed annually, so a county that qualifies for 2026 is not guaranteed to qualify for 2027 once next year's filings are approved. We rebuild this dataset each plan year rather than reusing prior-year figures, and we recommend employers do the same before every renewal.

Questions New York employers actually ask