The number of people covered by individual coverage health reimbursement arrangements doubled year over year and surpassed 500,000 at the start of 2026, driven largely by a surge in adoption among larger employers, according to the HRA Council’s fifth annual report on the state of the ICHRA and QSEHRA markets.
The Aug. 12 report includes information from 17 companies and covers more than 200,000 enrollment records across all 50 states, with the council estimating that its data now represents 75% to 80% of total ICHRA market activity. The report found that ICHRA’s growth trajectory held even as the ACA marketplace faced stress from the expiration of enhanced premium tax credits and rising monthly premiums heading into the 2026 plan year.
ICHRAs allow employers to provide tax-free funds for employees to purchase health coverage on the ACA marketplace or off-exchange. QSEHRAs allow employers with fewer than 50 employees to reimburse employees for individual health insurance premiums and other qualified medical expenses on a tax-free basis.
Eight notes:
- More than 20,000 businesses now offer an ICHRA or QSEHRA in 2026, covering more than a half million employees and their dependents, up from roughly 13,000 businesses and an estimated 250,000 covered lives in 2025.
- The ICHRA market roughly doubled in employer adoption year-over-year on an aggregated basis. The most conservative measure of growth, based only on a returning cohort of data providers who shared in both 2025 and 2026, showed 34% year-over-year growth. An estimate that normalized for new data providers put growth at 49% to 54%.
- Large employer ICHRA adoption grew 108% on an aggregated basis. Employers with 1,000 or more employees grew 178% year-over-year, and employers with 500-999 employees grew 105%.
- 56% of marketplace enrollments via ICHRA in 2026 are by individuals under the age of 45, with their dependents tending to be younger. The council said the younger demographic has had a positive effect on ACA risk pools that multiplies as larger employers adopt the model.
- Gold plans represented the most popular metal tier selection on average across the 2023 to 2025 period at 34%, followed by Silver at 32% and Bronze at 29%. Meanwhile, 81% of ICHRA employees elect to spend more than their employer’s allowance for better coverage, paying a median of $105 per month above the employer contribution. Only 19% selected plans fully covered by or that went under their employer allowance.
- The median monthly employer allowance per covered life is $459, and the median monthly premium per covered life is $567, resulting in an allowance-to-premium ratio of 81%.
- More than two-thirds of small businesses offering ICHRA in 2026 previously offered no health benefits. Among small employers offering QSEHRA, 93% were also new to offering coverage. Nearly a third of small employers that adopted ICHRA transitioned from the small group market.
- Employer retention rates remain high, with 89.5% of small employers and 77.4% of employers with more than 50 workers offering ICHRA in 2026 were renewing from a prior year.
At the Becker's 5th Annual Fall Payer Issues Roundtable, taking place November 2–3 in Chicago, payer executives and healthcare leaders will come together to discuss value-based care, regulatory changes, cost management strategies and innovations shaping the future of payer-provider collaboration. Apply for complimentary registration now.
