There are major disruption opportunities ahead in the employer group insurance market by way of individual exchange coverage, and some payers are hedging their bets on the market through a newer product: ICHRAs.
ICHRAs, or individual coverage health reimbursement arrangements, allow employers to offer a defined tax-advantaged contribution used to reimburse premiums for an individual health plan purchased by an employee on their state's ACA exchange.
When first established in 2019, HHS estimated "that once employers fully adjust to the new rules, roughly 800,000 employers will offer ICHRAs to pay for insurance for more than 11 million employees and family members."
Five key market updates:
1. The ACA marketplace is the fastest growing segment in the health insurance industry. Over 20 million people have enrolled in individual insurance plans on the ACA exchange for 2024, a record high.
2. Marketplace growth is being driven by federal premium subsidies that exist through 2025, Medicaid redeterminations pushing individuals to ACA coverage, and a growing population of gig economy workers nationwide.
3. Many of the nation's largest payers expanded their ACA footprint in 2024, signaling industry confidence in the market segment's future and growth potential.
4. Centene is the largest ACA exchange payer, with 3.7 million people enrolled as of Sept. 30, an increase of 75% year over year. The company also has 13,000 people enrolled in ICHRAs. In 2024, Centene partnered with health benefits platform Take Command to offer ICHRAs to employers in Indiana.
5. Oscar Health expanded its ACA footprint to 18 states and 512 counties in 2024. At the J.P. Morgan Healthcare Conference in January, CEO Mark Bertolini said the company expects the company's exchange enrollment to hit 1.3 million this year.
“Our first market opportunity will be in ICHRA. We believe ICHRA’s time has come," he said. "We believe we have a different approach than most other people in that marketplace, but that will give us an advantage in growth in 2024 and 2025.”