# ICHRA age rating calculator

Source: https://www.getprescience.com/tools/ichra-age-rating-calculator
Author: Rishab Jain, Cofounder and CEO, Prescience
Published: 2026-11-04
Updated: 2026-11-04
Cite as: Rishab Jain. "ICHRA age rating calculator." Prescience, November 4, 2026. https://www.getprescience.com/tools/ichra-age-rating-calculator

Individual health insurance costs more as people get older: under the federal default age curve, a 64-year-old's premium is three times a 21-year-old's. An ICHRA lets you raise allowances with age to match, as long as the oldest employees in a class get no more than three times what the youngest get. Enter the allowance for your youngest employee, and this calculator scales it along the same curve insurers use.

- **Age 21 factor:** 1.000
- **Age 40 factor:** 1.278
- **Age 64+ factor:** 3.000
- **ICHRA age limit:** Oldest ≤ 3× youngest, per class

## Scale an ICHRA allowance by age

_Interactive calculator: open the page in a browser to use it. The rules and figures it applies follow._

The calculator multiplies your base allowance by the ratio between each age's factor and your youngest employee's factor, then caps the result at three times the base. A handful of states and DC use their own age curves; the federal default is a good approximation everywhere else.

## The federal default age curve

ACA-compliant individual and small-group plans can vary premiums by age, but no more than 3 to 1 for adults. CMS publishes a default curve that most states use. It's flat in the early 20s, rises slowly through the 30s and steeply after 45.

**Federal default age factors (selected ages)**

| Age | Factor | $400 at 21 becomes |
| --- | --- | --- |
| 21 to 24 | 1.000 | $400 |
| 30 | 1.135 | $454 |
| 35 | 1.222 | $488.80 |
| 40 | 1.278 | $511.20 |
| 45 | 1.444 | $577.60 |
| 50 | 1.786 | $714.40 |
| 55 | 2.230 | $892 |
| 60 | 2.714 | $1,085.60 |
| 64 and older | 3.000 | $1,200 |

Children under 15 have a factor of 0.765, and ages 15 to 20 rise from 0.833 to 0.970. Those apply to dependents' premiums; an ICHRA's family allowance can reflect them.

## The ICHRA rules on varying allowances by age

- **Allowances can increase with age** within an employee class, as long as everyone in the class of the same age gets the same amount.
- **The 3:1 limit.** The amount for the oldest participants can't be more than three times the amount for the youngest in the same class.
- **Family size can vary too.** You can set separate amounts for employee-only, employee plus spouse, and family, and age-scale each.
- **Classes are separate.** Each class, such as full-time, part-time, or employees in a different rating area, can have its own base amount.
- **Same terms within a class otherwise.** You can't give higher allowances to particular people outside these rules.

> **Why the 3:1 cap rarely binds:** The federal curve itself runs from 1.000 at 21 to 3.000 at 64, so allowances that follow it stay inside the limit when your youngest employee is 21 or older. The cap only matters if your youngest employee is under 21, where the curve starts below 1.000.

## Worked examples

**A team from 24 to 58**

Illustrative. A 12-person company sets a $400 monthly allowance for its youngest employee, who is 24, and scales it by the federal curve.

- Age 24: $400
- Age 35: $400 × 1.222 = $488.80
- Age 50: $400 × 1.786 = $714.40
- Age 58: $400 × 2.548 = $1,019.20

**The 58-year-old gets 2.5× the base, within the 3:1 limit.** Each allowance buys roughly the same plan at each age.

**A team with an 18-year-old intern class**

Illustrative. A $400 base allowance for an 18-year-old (factor 0.913), with a 64-year-old in the same class.

- Age 64 by the curve: $400 × 3.000 ÷ 0.913 = $1,314.35
- 3:1 cap: $1,200
- Allowance at 64: $1,200

**Capped at $1,200.** Putting under-21 employees in their own class (for example, seasonal or part-time) avoids this.

## How to choose the base amount

The base allowance for your youngest employee decides everyone else's. Most companies set it so that it covers a particular plan in full or in part, then let the age curve do the rest.

1. **Pick a benchmark plan** Usually the lowest-cost or second-lowest-cost silver plan where most of your team lives. HealthCare.gov or your state exchange shows prices by age and ZIP code.
2. **Look up its price at your youngest age** For example, a silver plan at $450 a month for a 25-year-old.
3. **Decide what share you want to cover** Covering 100% of the benchmark at every age is generous; 70% to 90% is common.
4. **Scale by age** Enter the base here and check the oldest employee's amount against your budget.
5. **Check affordability if you have 50+ full-time employees** Each full-time employee's allowance must make the lowest-cost silver plan affordable. Lower-paid older employees are the usual problem.

**Use the age-adjusted model for a Choice comparison**

Review actual employee locations and family tiers before setting the allowance budget. Keep the local policies, employee costs and administration charge separate from the age-rating illustration.

[Start my Choice comparison](https://www.getprescience.com/employer/choice)

[Check the affordability assumptions](https://www.getprescience.com/tools/ichra-affordability-calculator)

## Family allowances and age

Most ICHRAs set separate amounts for employee only, employee plus spouse, employee plus children and family. You can age-rate each tier using the employee's age, which is the simplest approach and what most administrators support.

**Illustrative family tiers, scaled by the employee's age**

| Tier | Age 25 base | Age 45 (×1.444 ÷ 1.004) | Age 60 (×2.714 ÷ 1.004) |
| --- | --- | --- | --- |
| Employee only | $400 | $575.30 | $1,081.27 |
| Employee + spouse | $800 | $1,150.60 | $2,162.55 |
| Employee + children | $700 | $1,006.77 | $1,892.23 |
| Family | $1,100 | $1,582.07 | $2,973.51 |

The 3:1 limit applies within each tier: the oldest employee-only amount can't exceed three times the youngest employee-only amount, and so on.

## Combining age rating with employee classes

ICHRA lets you set different allowances for different classes of employees, and age-rate within each class. The permitted classes are defined in the regulations, and you can combine some of them.

**Permitted ICHRA employee classes (selected)**

| Class | Example use |
| --- | --- |
| Full-time and part-time | A higher allowance for full-time staff |
| Salaried and hourly | Different amounts for office and shift workers |
| Rating area (location) | Higher allowances where premiums are higher |
| Seasonal employees | A separate amount, or none |
| Employees in a waiting period | No allowance until eligible |
| Non-resident aliens with no U.S. income | Excluded |

Location classes are the most useful companion to age rating. Individual premiums vary as much by place as by age, so a team spread across states often uses one class per major rating area, each with its own base amount scaled by age. Some classes carry minimum size rules when you also offer a group plan to other employees.

## Explaining age-based allowances to your team

Employees will compare allowances, and a younger employee may wonder why a colleague gets twice as much. The clearest explanation is that the allowance follows the price of insurance, not the person: everyone gets the same share of a comparable plan at their age, which is how individual premiums are set by law.

- **Show the benchmark.** "Your allowance covers about 85% of the second-lowest-cost silver plan for your age."
- **Point out what's equal.** Everyone in the class gets the same share of the same kind of plan.
- **Put it in the ICHRA notice.** The required notice tells each employee their allowance; adding the method avoids questions later.
- **Revisit it each year.** Individual premiums change every January, so update the base amount at renewal and re-run the ages. Employees also move up the curve as they age, so their allowance rises automatically.

## Should you age-rate your ICHRA?

A flat allowance is simpler, but it favors young employees. If every employee gets $500, a 25-year-old may get a plan for free while a 60-year-old still pays $600 a month. Age-rating gives each employee about the same buying power and is what I'd recommend for most teams with a wide age range.

It also matters for the ACA. If you have 50 or more full-time employees, each one's allowance has to make the lowest-cost silver plan affordable. Older employees are the ones a flat allowance most often fails. Check each age with the [ICHRA affordability calculator](https://www.getprescience.com/tools/ichra-affordability-calculator), and see our [ICHRA contribution strategy guide](https://www.getprescience.com/guides/ichra-contribution-strategy) for how to pick the base amount.

## Age-rated allowances with Prescience Choice

Choice sets allowances by class, family size and age, and shows each employee their allowance next to the plans available where they live.

> **Prescience Choice: ICHRA for $20 per enrolled employee per month.** Choice applies the age curve for you, so each employee's allowance tracks the plans they can actually buy.
> - **You set a monthly allowance;** each employee picks and owns an individual plan
> - **$20 per enrolled employee per month,** with no setup or platform fee
> - **Works in all 50 states and DC,** so remote and multi-state teams fit
> - **Plan comparison, enrollment help and Crystal,** our assistant for benefits questions
> Best for small teams, teams in several states, and anyone pricing ICHRA. [Get a Choice quote](https://www.getprescience.com/employer/choice)

## Frequently asked questions

**Can ICHRA allowances vary by age?**

Yes. Within a class, allowances can increase with age, as long as the oldest participants' amount is no more than three times the youngest participants' amount.

**What is the 3:1 rule for ICHRA?**

The maximum allowance for the oldest employees in a class can't exceed three times the maximum for the youngest employees in that class.

**What is the federal default age curve?**

CMS's table of premium ratios by age used by most states for ACA plans. It sets 1.000 at ages 21 to 24 and rises to 3.000 at 64 and older.

**Do all states use the federal age curve?**

No. A few states and DC use their own curves, and New York and Vermont don't rate by age. In those places, set allowances using local premiums instead.

**Can I age-rate the family allowance too?**

Yes. You can vary allowances by family size and by age within each family-size tier, as long as the 3:1 limit holds.

**Is age-rating an ICHRA discriminatory?**

No. It's expressly allowed by the ICHRA regulations, which is why the 3:1 limit exists. It mirrors how individual premiums are priced.

## Sources

- [CMS, federal default and state-specific age curves](https://www.cms.gov/cciio/programs-and-initiatives/health-insurance-market-reforms/downloads/statespecagecrv053117.pdf)
- [Final ICHRA regulations, Federal Register (June 20, 2019)](https://www.federalregister.gov/documents/2019/06/20/2019-12571/health-reimbursement-arrangements-and-other-account-based-group-health-plans)
- [CMS, Health Reimbursement Arrangements (ICHRA) overview](https://www.cms.gov/marketplace/private-health-insurance/health-reimbursement-arrangements)
- [45 CFR 147.102, Fair health insurance premiums (age rating)](https://www.ecfr.gov/current/title-45/section-147.102)
- [CMS, ACA market rating rules](https://www.cms.gov/marketplace/private-health-insurance/market-rating-reforms)