New research shows growing employer interest in ICHRA | hioscar Blog | Oscar
New research shows growing employer interest in ICHRA
Employers are taking a closer look at a different way to help their people pay for healthcare.
Employee Health BenefitsOscar Insights
3 min read
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New research (opens in new tab) from the Employee Benefit Research Institute (EBRI) and Morgan Health found that 1 in 3 businesses offering health benefits report they are likely to adopt an Individual Coverage Health Reimbursement Arrangement (ICHRA) within the next two years.¹
The findings point to a meaningful shift in how employers are thinking about health benefits. Instead of choosing a single group plan for most employees, an ICHRA (opens in new tab) allows an employer to contribute a set amount of money that employees can use to buy individual health insurance coverage.
For employers balancing rising costs with the varying healthcare needs of their workforce, that flexibility is getting harder to ignore.
Flexibility and choice are driving interest
Employers were most likely to consider an ICHRA because of three potential advantages: more flexibility in benefit design, greater choice for employees, and affordability for the business.
Those priorities reflect a workforce that is increasingly varied. Employees may live in different states, work remotely, have different family needs, or prefer different doctors and plan designs. A single group plan may not work equally well for everyone.
An ICHRA gives different types of employee groups the opportunity to shop for coverage that better fits their circumstances while giving employers more control over how much they contribute. Employers showed the strongest interest in offering an ICHRA broadly across their workforce. Forty-six percent said they were very likely to offer an ICHRA to all employees, compared with 30% for remote employees, 28% for new hires, and 20% for part-time employees.
Familiarity and interest generally increased with company size.
Among businesses that currently offer health coverage, employers with 100 or more employees showed the strongest near-term interest: 62% said they were likely to adopt an ICHRA within the next two years. Interest was especially notable among employers with 500 to 9,999 employees, with roughly half reporting they were likely to adopt an ICHRA in that time frame.
Among small businesses not offering coverage today, 1 in 4 said they prefer ICHRA over a traditional group plan. However, awareness remains a major gap for this group as 55% were not aware that ICHRA is an option for them. For these employers, an ICHRA can provide a more flexible way to begin contributing toward employee coverage without taking on the same structure as a conventional group plan. Clear information, practical guidance, and support from trusted benefits experts could help more small employers understand whether the model is right for them.
The survey also found that many employers are still in the evaluation stage. They were more likely to be exploring an ICHRA than actively planning to implement one. That distinction matters. It suggests the market is growing, but many benefits teams are still learning how ICHRA could work for their employees and their business.
Employers want an experience that works for people
Interest in ICHRA is not only about costs. Employers also want confidence that the experience will be simple and useful for their employees.
Survey respondents placed the most value on access to high-quality plans and doctor networks. They also highlighted employee education, claims and reimbursement support, decision-making tools, and seamless payroll integration as features that could make them more likely to adopt an ICHRA model.
Broker and benefits consultant guidance matters, too. Seventy-seven percent of employers said a recommendation from a broker or benefits consultant would make them at least somewhat more likely to offer an ICHRA.
The takeaway is that employers may be ready for more flexibility, but they do not want to hand employees a reimbursement and wish them luck. They want a thoughtful experience that helps people understand their choices, find coverage, and use their benefits with confidence.
What comes next for ICHRA
More employers are learning about ICHRA, actively evaluating them, and many see an opportunity to offer benefits that are more flexible for the business and more personal for employees.
As the supporting tools, guidance, and coverage experience continue to improve, ICHRA could become an increasingly important part of how employers help people access healthcare.
