Individual coverage health reimbursement arrangements are at an inflection point — payers are catching on, but not to the point of industry mass-adoption, and some employers still have their doubts.
Rather than providing a group health plan, employers can offer workers tax-free funds to select their own coverage from the individual marketplace through an ICHRA. Over the last five years, ICHRA adoption has increased by more than 1,000%, according to the HRA Council’s annual growth trends report. While still a relatively small force in the industry despite the uptick in adoption, lawmakers have also expressed interest.
Becker’s heard from three healthcare leaders on ICHRA’s positioning for 2026.
Alan Silver, president of Centene’s ICHRA business, is the first to hold the role. Unsurprisingly, he’s bullish — but with caveats.
“The ICHRA era begins now. I say that cautiously, but at the same time, rather boldly,” Mr. Silver said. He elaborated on how the company has been testing ICHRAs, but now, “this thing’s here,” and employers are making moves.
Insurers may be concerned about cannibalizing their own business, especially in group coverage, Mr. Silver said. In order to develop a robust ICHRA strategy, he said competitors already need to have a foothold in the individual market, too.
Mr. Silver also noted how the public may still associate ICHRAs with smaller employers, even if that is not necessarily the case.
“I really am trying to get people away from this concept that the only people that are adopting this are smaller employers who haven’t had coverage before,” he said. “That is a great, wonderful story about expanding coverage to people in the U.S. The reality, though, is we have an opportunity — if our ICHRA era is now — to offer something affordable and attractive in the way of choice for employees. And that is not a small employer value proposition. It’s across all employers.”
Louis DeStefano, senior vice president of growth at Oscar Health, said some of the first groups that migrated to ICHRAs could have been “under duress” and needed to save. Now, he sees ICHRA serving as a “curated benefit where it’s not a premium-only play” in the coming years.
“If I can get a plan for myself that has no cost for pediatric urgent care — I’ve got three little kids — I’d buy it tomorrow,” he said.
AI can be one tool toward driving personalization as employees search for insurance.
“There are 10,000 vacuum cleaners, but I’m not going to look at all 10,000 of them. I need to drill down,” Mr. Silver said. “We need AI to help us personalize that coverage.”
Rob Andrews is the CEO of the Health Transformation Alliance, a cooperative of America’s self-insured companies. While not entrenched in ICHRAs himself, in his experience working with large employers, he still does not see a seismic shift on the horizon.
He said employers have two concerns: One is whether the product is “a reliable, tried-and-true card to have in your wallet” that providers will recognize, and the second is “getting the worst of both worlds,” meaning losing leverage over the provider while the company still gets complaints.
Mr. Andrews said employers weigh coverage decisions by asking, “Does this make it easier or harder for me to recruit and keep good people?” He said that taking the risk and transitioning may not be worthwhile for larger employers.
Another concern for employers: The state of the individual marketplace. Lingering uncertainty over the future of ACA subsidies, for example, has done little to assuage doubts.
“There’s a bit of a scary thought about the individual market at the current moment in time,” Mr. Silver said. “It doesn’t actually matter what the end state looks like. We need a stabilized individual market at the current moment in time that allows us to get to a place where employers are confident that, if they were to move to an ICHRA, their people would be well taken care of.”
Despite the current landscape, some larger employers are considering ICHRAs, but their approach may look different than their smaller counterparts.
“You’re not going to see a national employer with 100,000 people probably make the shift all at once, but they may take a certain class or a certain state where ACA rates are very competitive and maybe the products are a bit richer, and say, ‘Hey, in this XYZ state, let’s move this population over,'” Mr. DeStefano said.
So, will 2026 be the year of ICHRA? The answer seems to come down to both employer sentiment and market fundamentals. While some carriers, like Centene and Oscar, already have a footprint they intend to build upon, others — both large employers and some insurers — are treading more cautiously. But if employers’ main concern is what their workers actually want — and health benefits are top of mind — ICHRA players have to lean into a value proposition of personalization, trust and guaranteed quality.
“It’s very easy for an employer to just buy a national PPO that covers every state and probably has 90% of the doctors in the country in network. But then we can’t complain about costs at the same time, ” Mr. DeStefano said. “Healthcare requires more choice, and ICHRA is a way to get there.”
