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Strong Growth of ICHRA Among Large Employers

The 2026 annual report from the HRA Council has revealed significant growth in the adoption of Individual Coverage Health Reimbursement Arrangements (ICHRA) by large employers. This growth is pivotal as it not only enhances the health benefits landscape but also positively affects the Affordable Care Act (ACA) marketplace. More than 20,000 businesses across the United States are utilizing ICHRA or Qualified Small Employer Health Reimbursement Arrangements (QSEHRA) to provide health coverage to at least 500,000 employees.

The Rising Trend of ICHRA

For the first time, the report demonstrates how hundreds of thousands of employees covered under HRAs impact the broader ACA market. More significantly, this demographic tends to skew younger, helping to balance the risk pool in the ACA marketplace. According to Robin Paoli, Executive Director of the HRA Council, ICHRA has become an attractive option for employers aiming to offer affordable health benefits while allowing employees to choose the plans that best meet their needs.

Key Findings from the 2026 Report

Among the most noteworthy insights from the report are:

• - Adoption by Large Employers: Applicable Large Employers (ALEs) are the fastest-growing segment adopting ICHRA. The number of such employers has more than doubled since the previous year. Rather than viewing ICHRA as a temporary solution to rising group coverage costs, these larger businesses are championing it as a suitable strategy for their workforce. Employees using ICHRA often have prior experience managing their health care needs and utilize benefits to optimize their health outcomes.

• - Demographics of ICHRA Users: More than half of those enrolling in ICHRA are under 45 years old, a shift indicative of a younger cohort compared to previous ACA individual planholders. This is particularly interesting as these younger employees are gravitating toward Silver and Gold plans, which may denote a preference for higher-quality health coverage.

• - Small Employers Joining the HRA Movement: More than two-thirds of small businesses adopting ICHRA and nearly all new QSEHRA introductions in 2026 previously lacked any health coverage for their employees. This suggests that ICHRA is serving as a vital gateway for these smaller firms to start providing health benefits.

• - Customization of Coverage: Employees are taking a proactive approach in tailoring their coverage. Some select plans that offer lower monthly premiums than their employers’ contributions, allowing them to save money, while others invest additional amounts for richer coverage. This empowerment signifies a shift towards a consumer-driven mindset in healthcare.

Challenges and Opportunities Ahead

Despite hurdles, including the expiration of Enhanced Advanced Premium Tax Credits and varying market conditions, the resilience of ICHRA is evident. The report indicates that the number of individuals covered by ICHRA exceeded 500,000 at the start of 2026.

State legislators have taken notice and are considering ICHRA as a means to provide broader health coverage options. The National Conference of Insurance Legislators (NCOIL) has even embraced bipartisan model legislation to promote tax credits for ICHRA adoption, highlighting the increasing recognition of its value in the marketplace.

In conclusion, the HRA Council’s findings reflect a dynamic shift in how health benefits are viewed by companies and employees alike. As ICHRA continues to grow, it presents an opportunity for large employers to enhance their employee offerings while bolstering the ACA marketplace and addressing the diverse health needs of a younger workforce.

For Further Information

For more details and insights from the full report, please visit the HRA Council’s Data Reporting Hub at www.hracouncil.org/report.