Is ICHRA or STLDI cheaper?

STLDI typically has the lower monthly cost (approx. $100-$300/mo unsubsidized), while ICHRA runs higher (employer allowance + individual plan premium (varies widely)). The cheaper option is not automatically better — weigh the coverage trade-offs below.

What is the main difference between ICHRA and STLDI?

Employer reimburses individual Marketplace or other personal coverage. Federally defined short-term limited duration insurance with state overlays.

Can I switch between ICHRA and STLDI?

Often yes, though timing rules apply. Comprehensive insurance changes usually happen during Open Enrollment or a Special Enrollment Period, so check the enrollment window before you switch.

ICHRA vs STLDI

ICHRA-funded individual coverage and STLDI short-term limited duration solve the same problem in different ways. An ICHRA lets employers give workers a tax-free allowance to buy individual health coverage, often on the ACA Marketplace. Employees keep consumer protections of individual plans while employers control contribution amounts by employee class. By contrast, Short-term limited duration insurance (STLDI) is temporary coverage that is not ACA major medical. Duration caps and consumer protections vary by state. Useful only for brief healthy gaps. Below we compare them on cost, coverage, eligibility, and who each one fits best — with sources you can check.

Factor	ICHRA	STLDI
Typical monthly cost	Employer allowance + individual plan premium (varies widely)	Approx. $100-$300/mo unsubsidized
Relative cost	$$·	$··
Category	Coverage model	Coverage model
Is it insurance?	Yes	Yes
ACA-compliant major medical	Yes	No
Covers pre-existing conditions	Yes	Varies
Eligibility	Must meet ICHRA offer and individual coverage rules.	Health questions common; state duration rules apply.
Best for	Employees at ICHRA-offering firms; Small businesses modernizing benefits	Brief healthy coverage gaps

ICHRA

An ICHRA lets employers give workers a tax-free allowance to buy individual health coverage, often on the ACA Marketplace. Employees keep consumer protections of individual plans while employers control contribution amounts by employee class.

Pros

Employer contribution
Individual plan choice
ACA protections when buying Marketplace plans

Cons

Subsidy interactions can be complex
Plan shopping burden on employee
Allowance may not cover full premium

STLDI

Short-term limited duration insurance (STLDI) is temporary coverage that is not ACA major medical. Duration caps and consumer protections vary by state. Useful only for brief healthy gaps.

Pros

Lower premium potential
Fast issue in some markets

Cons

Pre-existing exclusions
Not subsidy-eligible
Benefit gaps

Next step

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Frequently asked questions

Is ICHRA or STLDI cheaper?: STLDI typically has the lower monthly cost (approx. $100-$300/mo unsubsidized), while ICHRA runs higher (employer allowance + individual plan premium (varies widely)). The cheaper option is not automatically better — weigh the coverage trade-offs below.
What is the main difference between ICHRA and STLDI?: Employer reimburses individual Marketplace or other personal coverage. Federally defined short-term limited duration insurance with state overlays.
Can I switch between ICHRA and STLDI?: Often yes, though timing rules apply. Comprehensive insurance changes usually happen during Open Enrollment or a Special Enrollment Period, so check the enrollment window before you switch.

Sources

HealthCare.gov — the official ACA Health Insurance Marketplace · reviewed 2026-01-15
OLYRON HealthMatch editorial methodology — how we source and rate options · reviewed 2026-01-15