Employers are increasingly offering cash for workers to buy their own health insurance, with Individual Coverage Health Reimbursement Arrangements (ICHRA) gaining momentum. The number of people covered by ICHRAs has jumped 50% to about 450,000 in 2025, up from 2024. ICHRAs were created in 2019 and are now covering an estimated 500,000 people, mostly in small businesses. The arrangements offer a way for employers to control costs and shift risk to employees. While not expected to dominate the market, ICHRAs are seen as a slow but potentially significant shift in health insurance coverage.

ICHRA arrangements allow workers to shop for insurance through individual markets, providing a set contribution from employers for monthly premiums. Employers typically contribute anywhere from $500 to $1,000 per month, with plans being portable. Small businesses with up to 50 employees qualify for a tax credit, making ICHRAs attractive for cost control. Large employers are looking to reduce healthcare costs, leading to a shift towards ICHRAs. The future of ICHRAs depends on further adoption and potential market shifts due to economic factors.

Read more at Yahoo Finance: More employers are giving workers money to buy their own health insurance