Employers are moving towards Individual Coverage Health Reimbursement Arrangements (ICHRAs) for employee health insurance.

From Yahoo Finance: 2025-06-18 11:55:00

A growing number of employers are allowing workers to make their own health insurance decisions, using Individual Coverage Health Reimbursement Arrangements (ICHRAs) instead of traditional plans. This approach gives small businesses a chance to offer coverage and saves employers money. However, it shifts the burden of finding coverage to employees.

ICHRAs let workers choose their own insurance plans from a variety of options in the individual market. This approach was created during the Trump administration and has gained popularity in recent years. Businesses can predict costs and avoid making coverage decisions for employees, making it more manageable for small companies.

ICHRAs provide employees with more flexibility in choosing coverage tailored to their needs. However, individual market plans may have narrower networks than employer-sponsored plans, making it challenging for those with multiple doctors. Employers must assist employees with plan selection to navigate complex coverage options.

There are no precise national figures on the number of people covered through ICHRAs, but the HRA Council reports significant growth in enrollment. About 450,000 individuals were offered coverage through ICHRAs this year, up 50% from 2024. While these arrangements are growing, they still represent a small portion of employer-sponsored health coverage in the U.S.

The future growth of ICHRAs depends on factors like rising healthcare costs and potential tax incentives. More employers may adopt ICHRAs to limit expenses as healthcare costs escalate. Tax breaks and incentives in the current Republican tax bill under consideration could also encourage more companies to offer ICHRAs in the future.



Read more at Yahoo Finance: More employers are sending workers shopping for their own health coverage