Thatch alternatives: seven ways to do this, and what each one costs

What Thatch actually charges, so the comparisons are honest

Thatch publishes its prices, which I give it credit for. The Standard plan is $45 per enrolled employee per month plus a $50 monthly platform fee, for employers with 1 to 49 eligible employees. The fee is charged only on employees who enroll, which is fairer than charging on every head on the payroll.

The number people forget is the allowance. On a $600 monthly allowance for ten employees, the allowances are $72,000 a year and the platform fees are $6,000. The software is roughly 7% of the total, and the other 93% is money going to individual-market carriers. Any comparison that focuses on the $45 is arguing about the small number.

So an alternative to Thatch can compete in two places: the per-employee fee, and the underlying cost of the insurance the allowance buys. The first is easy to compare. The second is the one that decides whether an ICHRA was the right structure at all.

1 to 3: cheaper ICHRA administrators

The ICHRA administration market is competitive and the fees have been falling. PeopleKeep lists ICHRA administration from $25 per employee per month plus a base fee, with a three-seat minimum. Take Command's public page lists $25 or more per employee per month for employers with 1 to 49 employees and $100 or more at 50 and above, with a platform fee of $40 or more a month, while its 2025 consultant guide quotes $30 to $40 per employee plus a $100 monthly platform fee. Justworks resells Thatch's product as a CHOICE add-on at $25 per enrolled employee per month.

Prescience Choice runs the same structure at $20 per employee per month with no setup fee and no platform fee. On the 15-person team above, that is $3,600 a year instead of $8,700, a difference of $5,100 for the same administrative job: collect the allowance decision, let employees shop, reimburse premiums and substantiate the claims.

I want to be precise about what the fee difference does and does not buy. All of these platforms do roughly the same compliance work, because the rules are the rules and an ICHRA has to be documented, affordable and administered consistently. What differs is the shopping experience, the card, the support queue and the fee. Paying $45 instead of $20 buys you a nicer product. It does not buy a better insurance policy, because the policy comes from the individual market in every case.

One caveat about fee comparisons: check what is included. A cheap fee with an extra charge for the card, for year-end substantiation or for adding an employee mid-year is not cheap. Ask for the total annual cost at your headcount, including every module, in writing.

4 to 5: a group plan instead of an ICHRA

The strongest alternative to Thatch is not another ICHRA administrator. It is not running an ICHRA at all. A group plan pools your employees into one risk pool with negotiated network rates, and for a team with parents or employees over 50 it is usually cheaper in total, because the individual market prices those people sharply.

This is the argument the ICHRA industry does not lead with. KFF estimated individual-market premiums rose about 26% on average in 2026, and most individual plans sold on the marketplace are HMOs or EPOs with narrower networks than a typical employer PPO. An allowance that looked generous in 2024 buys noticeably less in 2026, and the employer absorbs that by raising the allowance or by letting employees pay the difference.

A group plan also fixes the deductible question in a way an allowance cannot. With an allowance, the employee picks a plan and the deductible comes with it, often several thousand dollars. With a well-designed group plan the deductible can be structured down, and a broad national PPO network means the specialist an employee already sees is likely in network.

The ICHRA case is real and worth stating. It wins for a distributed team of mostly young, single employees where a hard per-person budget is the point, and where the alternative is a thin group plan at a bad rate. It loses for a team with several parents, several employees over 50, or anyone who needs a specific specialist.

6 to 7: a PEO or a broker

A PEO is the bundling option. Rippling PEO, Justworks and the rest put payroll, workers' comp, HR support and access to large-group health plans into one invoice, with a service fee per employee per month. Justworks publishes PEO Basic at $79 and PEO Plus at $124 per employee per month with premiums on top. That is more than Thatch's $45, and it buys co-employment, compliance help and insurance access rather than a reimbursement platform.

The PEO comparison is not fee against fee. A company that needs workers' comp in four states, HR advice and a payroll system is buying four things, and the PEO fee covers all of them. A company that already has payroll and one state should compare the PEO fee against the cost of a group plan alone, because that is what it is actually paying for.

A broker is the seventh route, and the most common. A good broker will present an ICHRA, a group plan and a PEO option on the same page and tell you which one fits. Ask for its compensation in dollars, and ask whether any of it is contingent on placing a particular product. A broker that will show all three routes is earning its commission; one that only shows its own carriers is not.

There is a fourth route worth mentioning for completeness: keeping Thatch but changing the design. If you are on it and the census math works, a premium-only design or a narrower reimbursement rule reduces the allowance without changing the vendor. That is a cheaper fix than switching platforms, and it is worth a look before you migrate anything.

How to choose, in the order that matters

First, run the census. Take your oldest employee, your largest family and your lowest-paid employee, and price the individual plans available at each address at your proposed allowance. If the oldest employee and the family are paying a large gap out of pocket, an ICHRA is the wrong structure and no administrator will fix it.

Second, if ICHRA is right, compare administrators on total annual cost at your headcount, in dollars. The range is roughly $20 to $45 per employee per month plus platform and setup fees, and the job is the same. Ask what is included in the fee and what is charged separately.

Third, check the affordability test before you set a single allowance for everyone. An ICHRA that is affordable for an employee blocks their premium tax credit, and for lower-paid staff that can leave them worse off than no offer at all. Our ICHRA affordability calculator does the arithmetic for each employee.

Fourth, ask what happens when you leave. An ICHRA has no plan to port and no renewal to negotiate, so the exit is mostly administrative, and unspent card funds and final reimbursements still need a written answer. Get that answer before you sign, not after.

What to ask any Thatch alternative

• What is the total annual cost at my census, including every fee, in dollars?
• What is charged separately: the card, substantiation, setup, mid-year changes?
• What does the employee see, and how long does a reimbursement take?
• How is the affordability test calculated, and for which employees?
• What happens to unspent funds and final claims if we switch to a group plan?
• Who supports an employee whose claim is denied, and on what hours?
• Can I see a group plan quote for the same census before I commit?

Who should stay on Thatch, and who should move

Thatch is a good product and it has done more than anyone to make this model legible. It is also the most expensive of the administrators listed here, and the insurance it administers is the individual market, which is getting more expensive. Compare the fee, then compare the structure.

If the census math favours a group plan, is Thatch ICHRA worth it? walks the numbers employee by employee. If you are already on Thatch and considering a move, how to leave a PEO covers the sequencing even though an ICHRA is not a PEO.