Short answer: An ICHRA reimburses employees tax-free for individual health coverage and counts as an offer of coverage for the employer mandate. A health stipend is just taxable extra pay; simpler, but taxed for both sides and not a compliant offer of coverage.
Both put employer dollars toward employees buying their own insurance, but the tax and compliance treatment differs sharply. An ICHRA is a formal arrangement: reimbursements are tax-free, can vary by employee class, require the employee to have individual coverage, and count as an offer of coverage under the ACA employer mandate. A taxable stipend is just cash added to wages; no plan document, no proof of coverage required, but it’s subject to income and payroll taxes for the employee (and payroll tax for the employer) and does not satisfy the employer mandate. The ICHRA is usually the more efficient, compliant choice; the stipend wins only on pure simplicity.