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Benefits September 23, 2026
Leveraging ICHRAs for Healthcare Cost Predictability
With employers seeking ways to tackle premium hikes, individual coverage health reimbursement accounts could be part of the solution.
As employers continue to determine how best to address rising healthcare costs, increasing the use of individual coverage health reimbursement accounts may offer some predictability for company budgets.
Launched in 2020, an ICHRA is an employer-funded benefit that reimburses an employee for the cost of purchasing individual health insurance, rather than the employer providing a group health plan. With an ICHRA, employers contribute a fixed dollar amount that employees then use to buy their own individual health coverage.
Jamie Greenleaf, founder of Greenleaf Advisors and co-founder of Fiduciary In A Box, says that employers offering group plans can experience budget volatility based on the magnitude of the claims their employees file. But with an ICHRA, costs become “more predictable”—the employer does not absorb individual claims and can avoid absorbing projected at-or-near-double-digit group plan premium increases.
Plan sponsors have to “flesh out all the plan design options that are available to [them] and their employees and determine what’s in the best interest of the employee,” Greenleaf says. “Unfortunately, most employers are looking at what benefits should be taken away or replaced, not at how [they] can change plan design to reduce costs.”
Greenleaf suggests employers review healthcare plan utilization rates annually—ideally right after plan renewal—as part of making an informed decision for the following year. While open enrollment season for 2027 is already upon employers, she recommends thinking ahead to 2028 and beyond.
Options in the Marketplace
Ben Light, vice president of partnerships at Zorro, an ICHRA and benefits platform company, says employees are likely overinsured when they pay for what the Affordable Care Act refers to as a “gold level” plan, which has a very low deductible and low maximum out-of-pocket costs, but a high premium.
When employees drop down to a “silver” plan, however, with moderate premiums and out-of-pocket costs, or a “bronze” plan, with the lowest premiums and highest out-of-pocket expenses, Light says it “frees up other dollars.” Employees with ICHRAs are among the group that can make those choices.
Light says that when all bronze plans available on the federal Health Insurance Marketplace qualified to contribute to health savings accounts through a change in federal law, many people who selected bronze plans could take the money they did not spend on higher premiums and put it into HSAs to use on flat-fee arrangements for primary care or for other medical costs. Light suggests employers view ICHRAs as an “and,” not an “or,” healthcare strategy for their employees.
Groups that might be the best candidates for ICHRAs include employers that struggle to meet group plan enrollment minimums, have high turnover rates or are willing to go through the culture change—because “ICHRA is a culture change,” Light says, referring to the shift toward allowing employees to choose their own health plans.
Erik Wissig, the chief operating officer at health benefits technology company Surecompanies Inc.—better known as SureCo—says “micro-companies”—typically those with fewer than 50 employees—comprise the majority of employers adopting ICHRAs.
Obstacles to Adoption
Despite interest in ICHRAs among employers and employees, obstacles to adoption remain.
Employers’ hesitancy to adopt ICHRAs comes largely from their perception that employees prefer group plans, as well as the employers’ unfamiliarity with and uncertainty about ICHRAs, according to a joint study conducted this year by the Employee Benefits Research Institute and Morgan Health, a division of JPMorganChase & Co. Concerns about the affordability of individual market premiums and out-of-pocket costs were widespread, as well, cited by 85% and 84%, respectively, of large employers offering health plans; 81% and 84%, respectively, of small employers offering health coverage, and 79% and 72%, respectively, of small employers not offering health coverage.
Light says the reluctance of employers to adopt ICHRAs comes down to two factors: discomfort with losing control of plan design—which leads to the culture shock he mentioned; and a perceived stigma against health maintenance organization plans, which require participants to receive care exclusively from doctors, hospitals and other healthcare providers within the plan network. HMOs are most broadly available to ICHRA participants due to their prevalence in the marketplace—but HMOs have generally been criticized due to their lack of provider choice, Light says. However, Light claims that HMOs actually can offer comprehensive coverage.
To explain further why ICHRA adoption has been limited, Light says employers often express concern that employees would find a reimbursement arrangement confusing without significant help and education from the company. What is missing, Light says, is the “right amount of education” to put employees in a position to make their best healthcare decisions.
The big issue that remains is the “education curve.” Wissig says brokers are still learning the benefits of ICHRAs, while employers are still broadly unaware of them. He adds that it is the provider’s job to ensure brokers and consultants are well-educated. The education should then “cascade down” to the employers and employees.
Light says health insurance brokers are increasingly comfortable pitching ICHRAs as a strategy to new and prospective clients. According to SureCo’s annual “State of ICHRA” report, based on the 2026 SureCo Nationwide ICHRA Broker Survey, 56% of brokers reported that they recommend or implement the model. The share that report moving at least one client onto an ICHRA has more than doubled since 2024, to 37% from 15%.
Wissig says that a year ago, the predominant obstacle to adoption was a lack of awareness of ICHRAs in the broker/consultant community. Since then, awareness has expanded so much that 95% of brokers are aware of them, according to SureCo’s report.
Across the industry, roughly 1 million people are now enrolled in ICHRAs, according to SureCo. Brokers are not claiming, “this is an option of last resort,” Light says. “They’re saying, ‘this is a real strategy for you, and this is how you can control costs and offer more choice for your employees.’”
