Benafica is a health benefits and insurance company that helps employers offer flexible, tax-free health reimbursement plans instead of traditional group health insurance.
ICHRA for Auto Dealerships & Auto Services
ICHRA, also known as a CHOICE Arrangement, gives dealerships a more flexible way to provide health benefits while maintaining greater control over costs.
- Offer different allowances to salaried, hourly, and part-time staff
- Cover employees across every location and state
- Control costs without cutting benefits
Tire shop, collision center, or parts supplier? See who we work with 🠛
Health Benefits are Broken for Dealerships
Auto dealerships aren’t like other businesses. Your workforce includes full-time technicians, variable-hour sales staff, part-time lot attendants, and salaried managers, often spread across multiple rooftops in different states. Traditional group health plans force all of these roles into one rigid structure, leaving you overpaying for some employees and underserving others.
Meanwhile, the industry is facing a retention crisis. Benefits are one of the few levers dealerships can pull, but only if the benefit actually fits the workforce.
120 employees · 3 rooftops · 2 states
Lakeside Motors North
Rooftop 1 · Sales & service
52 staff
Lakeside Collision
Rooftop 2 · Body shop
28 staff
Lakeside Motors East
Rooftop 3 · Sales & service
40 staff
46%
Average employee turnover rate in the automotive industry
— Netchex, 2024
53%
of motor vehicle dealers offer medical benefits, well below the 69% national average
— MployerAdvisor, 2025
80%
Annual turnover rate for sales consultants at dealerships
— NADA Dealership Workforce Study
Built for the Auto World
Dealerships are where we started, but the same workforce problem shows up across auto-adjacent businesses: a mix of hourly, salaried, part-time, and seasonal staff, across multiple sites.
Vehicle sales
- New car and franchise dealerships
- Used car and independent auto sales
- Powersports dealers
- RV, camper, and trailer dealerships
- Marine and boat dealerships
- Heavy truck and commercial vehicle dealers
- Agricultural and equipment dealerships
- Auto auctions and wholesale operations
Auto services & repairs
- Independent auto repair shops
- Collision repair and auto body shops
- Tire sales and service centers
- Quick lube and oil change franchises
- Transmission and specialty repair
- Auto glass repair and replacement
- Mobile mechanics and fleet service
- Detailing and reconditioning
Parts, supply & manufacturing
- Auto parts manufacturers and suppliers
- Auto parts retailers and counters
- Parts distributors and warehouses
- Aftermarket and performance parts
- Salvage yards and auto recyclers
- Upfitters and custom build shops
Fleet & auto-adjacent
- Car washes and express wash chains
- Towing and roadside assistance
- Fleet management and maintenance
- Truck, trailer, and equipment rental
- Vehicle transport and auto hauling
- Automotive training schools
- F&I product providers and dealer services
Why ICHRA is Built for Dealerships
Set a defined monthly allowance for each employee class. Employees choose their own individual health plan and get reimbursed tax-free. You control costs. They get coverage that fits their life.
Designed for variable-hour workforces
Your sales floor, service bays, and detail shop don’t run 9-to-5. Create separate classes for full-time, part-time, and variable-hour workers, each with their own allowance. No minimum participation requirements.
One benefit across every rooftop and state
Two lots in one metro or twenty dealerships across five states: ICHRA works everywhere individual insurance is available. Employees shop plans that fit their area, providers, and family.
Flexible employee classes for every role
Tailor allowances using ICHRA’s 11 permitted employee classes:
- Full-time vs. part-time
- Hourly vs. salaried
- Geographic location
- Seasonal
Group Plan vs. ICHRA for Dealerships
| Traditional group plan | ICHRA with Benafica | |
|---|---|---|
| Multi-state locations | Requires multi-state carrier networks or separate plans per state | Employees shop local plans in any state. One program covers all locations |
| Variable-hour employees | Often excluded, or creates ACA tracking headaches | Classify variable-hour workers separately with their own allowance |
| Cost control | Premiums increase annually; limited negotiation leverage | Set a fixed monthly allowance per class. You choose the budget |
| Renewal | An increase every year, decided by the carrier | No renewal increase. The allowance holds until you change it |
| Employee choice | One or two plan options for everyone | Each employee picks the plan that fits their needs and family |
| Turnover impact | Paying for coverage on employees who leave mid-year | Allowance stops when employment ends. No wasted premium |
| Administration | Carrier negotiations, renewals, census management | Benafica handles enrollment, compliance, and reimbursements |
A Dealer Group by the Numbers
Each employee enrolls in an individual plan available in their state and gets reimbursed monthly up to their class allowance. The dealership controls spend by class and location, and Benafica manages enrollment, compliance, and reimbursements through BEN360.
We Handle the Administration, You See Everything
Benafica’s in-house ICHRA platform gives your HR and benefits team full visibility, with enrollment tracking, payment transparency, and on-demand reporting across every location.
- Real-time enrollment status across all rooftops
- Payment tracking from contributions to carrier payments
- Dedicated support for your team and your employees
What Dealerships Say
“We needed to find a solution for the rising cost of healthcare. Benafica moved us to an ICHRA, which has saved us money and increased employee satisfaction overall. Their service, knowledge, and responsiveness far exceeded my expectations.”
Laura H., HR Manager · Rydell Auto Center
~$500K
Annual savings
200+
Employees enrolled
200+
Employees enrolled
Frequently Asked Questions
Can we offer ICHRA to some employees and keep a group plan for others?
Yes. You can offer a group plan to one employee class and ICHRA to another. For example, keep salaried managers on a group plan and offer ICHRA to hourly technicians and sales staff. You just can’t offer both to the same class. When a group plan is in play, minimum class size rules apply to certain classes, so if the group you want to carve out is small, check the math first. We’ll run it for you.
Does ICHRA satisfy the ACA employer mandate for dealerships with 50+ employees?
Yes, it can. When an ICHRA is structured properly and the allowance is set at an affordable level, it satisfies the employer mandate for applicable large employers. We model affordability against your census and design your allowances to meet an IRS safe harbor.
What happens when an employee leaves or is terminated mid-month?
Their ICHRA allowance stops when employment ends, so you only reimburse active employees. Unlike a group plan, where you may be paying premium through the end of the month, there’s no coverage to keep funding. And because employees own their individual plans, they can keep their coverage by paying for it themselves. In a business with dealership-level turnover, that adds up over a year.
Can we start ICHRA mid-year, or do we have to wait for January 1?
You can start at any point. Employees must receive enough notice before the plan year begins, so the real constraint is lead time, not the calendar. We’ll map your timeline backward from the start date you want.
How do employees pick a health plan?
Most employees choose their health plan directly through BEN360, where they can compare qualifying plans available in their area and select one that fits their needs and budget. Benafica’s team is available to help them understand their options and complete enrollment. Employees who purchase coverage elsewhere can submit their coverage and premium documents through the portal for review.
We have locations in multiple states. Is that a problem?
Not at all. It’s one of ICHRA’s biggest advantages. Employees in each state shop plans available in their area, with local provider networks. There’s no multi-state group network to manage and no out-of-network gaps.
What does this cost compared to what we pay now?
That depends on the allowance you set, which is the point. Your cost is the amount you choose for each class, multiplied by the employees who enroll, and it doesn’t jump at renewal unless you decide to change it. Send us your current renewal and census, and we’ll model ICHRA against your actual numbers.
Will our technicians actually be able to find good coverage?
In most markets, yes, often with more plan choices than a single group plan offers. Rural areas tend to have fewer options than metro areas, so before recommending anything, we can check actual plan availability by county for every location you operate.