More companies consider ICHRAs to combat rising healthcare costs

Rising healthcare costs might have some benefits pros saying, “Ain’t nobody got time (or money) for that.”

This is where an individual coverage health reimbursement arrangement (ICHRA) may be able to help.

An ICHRA is an employer-funded health plan, through which employees are given pre-taxed money to help pay for medical costs and independent health insurance plans, via a private insurer or the government, HR Brew previously reported. Since their creation in 2020, ICHRAs have been most commonly offered by small businesses in need of more affordable health insurance for their workers.

But, now larger companies are jumping on the bandwagon: 62% of companies with 100 employees and 50% of companies with 500–10,000 employees said they’re likely to offer an ICHRA in the next two years, according to a recent report from the Employee Benefit Research Institute (EBRI).

“The budget really was the driving factor, and how can we help absorb that cost, not just for us as an organization, but our employees as well?” Rachel Fitzgerald, an HR business partner at BrightView Health, previously told HR Brew, about their organization’s decision to offer an ICHRA in 2025.

The majority (85%) of companies would be more likely to move to an ICHRA if they could ensure employees would receive the same quality of healthcare as they might through a traditional group health plan, the EBRI report found. But even still, ICHRAs may not make sense for every employer, depending on their location and size.

“There are some regions where it’s like, ‘Oh, man, the group plan’s got to be really bad for an ICHRA to make sense,’” Jack Hooper, who leads Take Command Health, an ICHRA administrator that counts BrightView as a customer, previously told HR Brew.