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More large employers adopt ICHRAs as group costs rise
A new HRA Council report says ICHRA adoption among large employers with 50 or more full-time equivalent staff more than doubled year over year, with employees using the allowance to buy ACA marketplace plans.
Large employers are increasingly using health reimbursement arrangements, with more than 20,000 US businesses now offering an individual coverage health reimbursement arrangement, or ICHRA, as a primary employee health benefit. That is a 53.0% jump from 2025, according to the HRA Council's Growth Trends for ICHRA & QSEHRA report, which is based on anonymized data from 17 HRA Council member organizations.
The report highlights that the key shift is who is driving adoption. Applicable large employers, defined as companies with 50 or more full-time equivalent employees, are the fastest-growing segment of the market, with an adoption rate that more than doubled year over year, a change from ICHRAs being seen mainly among smaller employers unable to afford traditional group coverage.
Under an ICHRA, employers set a fixed monthly contribution that employees use to purchase coverage on the Affordable Care Act marketplace or another exchange. The employer cost becomes predictable, and employees can select plans based on their own circumstances, rather than being covered by a single workforce-wide option.
The HRA Council also examined how people use ICHRAs, finding enrollments skew toward workers under 45 and that many choose Silver or Gold tier plans. The data also shows varied strategies, including some employees adding more than $100 per month of their own money to access richer coverage, while others select plans with premiums below the employer allowance and use the remaining funds for other approved medical expenses, the outlet said.
Insurance Business reports that the 2026 plan year faced headwinds, including the expiration of enhanced Advance Premium Tax Credits that had subsidized ACA marketplace coverage, but the group said the ICHRA ecosystem is expanding and helping cover more Americans while strengthening the risk pool for the ACA marketplace.
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