#United States #Washington #ICHRA #QSEHRA #Health Reimbursement Arrangements

New Data on Health Reimbursement Arrangements

The HRA Council has recently unveiled the fourth volume of its annual report titled "Growth Trends for ICHRA & QSEHRA," offering vital insights into the expansion of Health Reimbursement Arrangements (HRAs) within the United States. This report compares figures from 2020 to 2025, focusing specifically on the years 2024 to 2025 and showcasing statistics from various organizations that have consistently contributed data over the past six years.

The findings highlight a remarkable trend towards flexibility and individual choice in health plans among employees. By utilizing employer funds for individual health insurance purchasing, employees are leveraging their options within the structure of ICHRA and QSEHRA, effectively choosing insurance solutions that align best with their personal needs and budgetary constraints.

Key Findings from Volume 4

1. Adoption by Large Employers: The adoption rate of ICHRA among applicable large employers (ALEs with over 50 full-time employees) has seen a striking rise. Membership amongst these employers increased by 34%, with certain cohorts experiencing a growth spurt of 49% from 2024 to 2025.

2. Small Employer Engagement: Notably, smaller employers, specifically those with fewer than 50 full-time equivalent employees, have also started to embrace both ICHRA and Qualified Small Employer HRAs (QSEHRAs) significantly, with a 52% increase in adoption noted among the founding members of the HRA Council.

3. Gateway to Coverage for Small Employers: A noteworthy aspect of the findings is that 83% of employers introducing ICHRA or QSEHRA in 2025 did not offer any prior coverage, while a smaller 17% shifted from traditional group insurance plans. This showcases the role of HRAs as essential pathways for small employers to provide employee benefits.

4. Enhanced Coverage for Dependents: The report also reflects an improving trend in dependent coverage, with the dependent coverage ratio climbing to 0.67. This indicates that employees are increasingly opting for options that allow them to procure health insurance for their families through ICHRA and QSEHRA schemes.

Insights from HR Leaders

Robin Paoli, Executive Director of the HRA Council, emphasized the transformational patterns revealed by the data, stating, "Employers are registering the significance of HRAs in presenting customizable and cost-efficient health coverage alternatives. For the first time, employees and their families can assert choice over health plans that best meet their requirements."

Notably, purchase patterns reveal a resilient trend where nearly 70% of employees are selecting Gold or Silver-tier Marketplace plans through employer contributions rooted in ICHRA and QSEHRA. This trend not only empowers younger workers but also works towards building stability within risk pools, fostering a more diverse and affordable range of plans across the nation.

Eugene Sayan, the Chairman of the HRA Council Board, remarked on the continued growth patterns of ICHRA, affirming its sustainability and scalability for employer-sponsored health benefits. He called for collaboration among various stakeholders, such as payers, benefit technology providers, and employers to further enhance health benefits availability for all employees.

Outlook for ICHRA and QSEHRA

The report further dissects data collected both from aggregate sources and a curated control group known as 'Founding Members', showcasing even higher year-over-year growth in ICHRA participation among the pioneering members of the HRA Council. A second wave of ICHRA vendors is beginning to attract larger employers at an increasing rate, reflecting broader acceptance.

The HRA Council's collected data sets a statistically relevant framework for gauging overall U.S. adoption of ICHRA and QSEHRA, suggesting that this model could encompass offers to over a million Americans, a number that seems poised to rise.

To explore further insights and access the complete Volume 4 report, please visit the HRA Council's Data Reporting Hub at www.hracouncil.org/report.

About the HRA Council

The HRA Council exists as a non-partisan, nonprofit trade association dedicated to enhancing understanding of defined contribution health and wellness benefits while striving to broaden access and affordability of health coverage for American employees. By fostering collaboration with industry leaders, policymakers, and stakeholders, the Council is committed to progressive education, comprehensive research, and effective advocacy that supports the advancement of employer-mediated health benefits.