Centene’s individual coverage health reimbursement arrangement business has grown to around 50,000 members, two and a half times larger than a year ago, executives said on the company’s second-quarter earnings call July 28.
“Some of that is driven by the fact that employers, and we’re among those, are seeing the pressures of cost drivers going up and those getting passed through to us,” CEO Sarah London said. “It’s also the fact that in a number of geographies, the options for small group are deteriorating.”
Ms. London called ICHRA a “great option for the future” while acknowledging it remains a small piece of Centene’s overall portfolio, which includes about 3.5 million marketplace enrollees and nearly 26 million members overall.
First authorized under a federal rule that took effect in 2020, the ICHRA model has grown in popularity, especially among small businesses, though little data from non-industry sources is available. According to the HRA Council, ICHRA use is up more than 1,000% since 2020, with the overall market possibly now containing up to 1 million people.
Centene has been among the model’s most vocal proponents within the industry. The company also transitioned hundreds of its own employees in Indiana to ICHRA this year.
Employer interest, however, appears to still be outpacing actual adoption, according to a survey published July 28 by the Employee Benefit Research Institute and Morgan Health, part of JPMorganChase. More than one-third of the 984 benefits decision-makers surveyed said they are planning or evaluating an ICHRA at their business, but just 11% said they are actively planning implementation. Among employers with 100 or more employees, 62% said they were somewhat or very likely to offer an ICHRA in the next two years after reviewing what the model entails.
The survey also found awareness gaps in the segment insurers have targeted most aggressively: small businesses not currently offering health coverage. One in four said they would prefer an ICHRA to a traditional group plan, but 55% were unaware ICHRAs are available to them. Employers overall cited concerns about individual market premiums, provider networks and plan quality as the largest barriers.
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