ICHRA and Dental/Vision Coverage: What's Covered, What's Not in 2026

The core rule: what ICHRA is designed to reimburse

To understand the dental and vision question, you need to understand what ICHRA was designed to do. Under the final IRS and Treasury regulations published in 2019, an Individual Coverage HRA reimburses employees for two categories of expenses: (1) premiums for individual health coverage — meaning ACA-compliant individual and family health insurance plans purchased on or off the Marketplace — and (2) out-of-pocket costs that qualify as medical expenses under Section 213(d) of the Internal Revenue Code and IRS Publication 502.

That second category is broad and includes a substantial range of dental and vision expenses. What it does not include is premiums for plans that the law classifies as "excepted benefits." This distinction is the crux of the dental and vision question, and it trips up a lot of employers and employees when they first set up ICHRA.

Standalone dental insurance and standalone vision insurance are almost universally structured as excepted benefits under the Health Insurance Portability and Accountability Act (HIPAA) and the ACA. An excepted benefit plan is one that is limited in scope, sold separately from major medical coverage, and exempt from certain ACA market reform requirements. Because they are exempt from those requirements, they are also not individual health coverage under the ICHRA rules. ICHRA cannot reimburse premiums for plans that are not individual health coverage — and most dental and vision plans fall squarely into that category.

The practical upshot: if an employee is paying $30/month for a standalone Delta Dental plan and $12/month for a standalone VSP vision plan, ICHRA cannot reimburse either of those premiums. But if that same employee goes to the dentist and pays $180 out of pocket for a cleaning and X-rays, ICHRA can reimburse that expense directly.

What dental and vision expenses ICHRA can actually cover

The list of dental and vision expenses that qualify as reimbursable medical expenses through ICHRA is extensive. IRS Publication 502 is the definitive reference, and it covers most routine and restorative dental and vision care. Here is what employees can generally claim:

Dental expenses eligible for ICHRA reimbursement:

• Routine cleanings and preventive care (X-rays, fluoride treatments)
• Fillings, root canals, and extractions
• Crowns, bridges, and dental implants
• Dentures and denture repairs
• Orthodontics (braces, retainers) — including adult orthodontics
• Periodontal treatment
• Oral surgery
• Emergency dental care

Vision expenses eligible for ICHRA reimbursement:

• Eye exams (routine and medical)
• Prescription eyeglasses (frames and lenses)
• Prescription contact lenses and contact lens solution
• LASIK and PRK corrective surgery
• Prescription sunglasses
• Fees for fitting contact lenses

What is not eligible: Purely cosmetic procedures fall outside IRS Publication 502. Teeth whitening, cosmetic veneers for appearance only, and non-prescription sunglasses are examples of expenses ICHRA cannot reimburse. The line the IRS draws is whether the expense is for diagnosis, cure, mitigation, treatment, or prevention of disease — or for affecting any bodily structure or function. Aesthetics alone do not qualify.

Importantly, employees do not need to have dental or vision insurance to use ICHRA funds for these expenses. They can pay out of pocket and submit the receipt to their ICHRA administrator for reimbursement. This is actually an advantage for employees in situations where their out-of-pocket costs are lower than what a separate insurance premium would cost.

How employers should structure dental and vision benefits alongside ICHRA

For employers, the excepted benefit limitation creates a planning question: if you want to provide dental and vision coverage as a meaningful benefit — not just out-of-pocket reimbursement — how do you do it alongside ICHRA?

The short answer is: keep them separate. Do not try to run dental and vision premiums through ICHRA. There are several clean approaches:

Option 1: Offer a group dental and vision plan as a standalone employer benefit. This is the most common approach for employers with 10 or more employees. The employer pays some or all of the premium for a group dental plan (such as Delta Dental or MetLife) and a group vision plan (such as VSP or EyeMed) as separate benefits, entirely outside the ICHRA arrangement. Employees can use their ICHRA funds for out-of-pocket costs not covered by those group plans.

Option 2: Pair ICHRA with a Section 125 Cafeteria Plan. A Section 125 Cafeteria Plan allows employees to pay for eligible benefits — including standalone dental and vision premiums — with pre-tax dollars. This does not allow ICHRA to reimburse the premiums, but it allows employees to reduce their taxable income when buying dental and vision coverage on the individual market. The two arrangements run in parallel: ICHRA covers the medical plan premium and out-of-pocket costs; the Cafeteria Plan handles dental and vision premiums pre-tax.

Option 3: Rely on ICHRA's expense reimbursement capacity alone. For employers with healthy ICHRA allowances and employees who prefer more control, simply allowing employees to use ICHRA funds for dental and vision out-of-pocket costs — without providing or subsidizing a separate insurance plan — is a legitimate strategy. This works best for employees with low dental utilization or those who prefer to pay as they go rather than maintain insurance premiums year-round.

Before deciding, ask your ICHRA administrator what their platform supports. Some platforms have more flexibility in how expenses are categorized and approved; others have strict workflows. A conversation with your administrator upfront prevents reimbursement denials later.

ICHRA and HSA: covering dental and vision in combination

Employees who are enrolled in an HSA-eligible High Deductible Health Plan (HDHP) and participating in ICHRA face additional rules — but also gain an additional tool for covering dental and vision costs. This is covered in depth in our article on using ICHRA and an HSA at the same time, but here is the summary relevant to dental and vision:

A Health Savings Account (HSA) can pay for qualified dental and vision expenses tax-free — the same expenses eligible for ICHRA reimbursement. This means employees with both an HSA and ICHRA have two potential pots of money to draw from for dental and vision costs. However, to maintain HSA eligibility, the ICHRA must be structured as a "Limited Purpose ICHRA" — one that restricts reimbursements to vision and dental expenses only, rather than reimbursing general medical expenses before the HDHP deductible is satisfied.

If the ICHRA reimburses general medical expenses and the employee is enrolled in an HDHP, the employee loses HSA eligibility for months when ICHRA is available. Dental and vision expenses, however, can still be reimbursed by a Limited Purpose ICHRA without affecting HSA eligibility, because dental and vision care falls outside the HDHP deductible calculation.

The practical configuration for maximum benefit: employer offers ICHRA (limited purpose, restricted to dental/vision expenses) to employees on HSAs, and those employees use their HSA for other medical out-of-pocket costs. This preserves HSA tax benefits while still providing employer-funded dental and vision coverage through the ICHRA mechanism. Confirm this structure with your ICHRA administrator and a benefits counsel before implementation — the interaction between ICHRA and HSA rules has enough nuance that setup errors are common.

If you want to check whether your current ICHRA allowance meets the affordability threshold that determines employee eligibility for Marketplace tax credits, use the affordability calculator — the HSA and dental/vision questions often come up together during plan design.

Practical checklist: dental and vision with ICHRA

Before your plan year begins, run through these questions with your ICHRA administrator:

• Does your platform accept dental and vision expense receipts for reimbursement? Most do, but documentation requirements vary. Some platforms require an Explanation of Benefits (EOB); others accept itemized receipts directly from the provider.
• Are you trying to reimburse dental or vision premiums? If yes, stop. Verify with your administrator whether the specific plan qualifies — most standalone plans will not. Trying to reimburse excepted benefit premiums creates a compliance risk and could disqualify the ICHRA arrangement for the employee.
• Do your employees have HSAs? If so, confirm whether ICHRA should be structured as Limited Purpose to preserve HSA eligibility. This decision needs to be made before the plan year starts — it cannot be changed mid-year.
• Do you want to provide dental and vision insurance as a true benefit? If yes, set up a separate group dental and vision plan or a Section 125 arrangement. Do not assume ICHRA covers this automatically.
• Have you communicated clearly to employees what ICHRA will and will not reimburse? Employees often assume ICHRA works like an FSA and covers everything. A one-page FAQ at enrollment can prevent a flood of denied reimbursement claims.