2025 Outlook: Significant Investments in ICHRA Signal Changes Ahead

By Ben Light on January 07, 2025

The employee benefits landscape can often feel like “deja vu all over again” — continuous rate increases, cost-shifting, and mounting frustration. But with carriers, technology providers, investors, and brokers pouring resources into Individual Coverage Health Reimbursement Arrangements (ICHRAs), the market may finally have a new and viable solution to get employers out of the benefits business and give employees back control over their coverage. As we enter 2025, trends in ICHRA adoption, product innovation, and regulatory developments signal that this benefits model isn’t just here to stay — it’s poised to help redefine how we think about employer-sponsored healthcare.

Carriers double down on ICHRA

For employers, the goal is simple: ensure their contributions provide employees with coverage comparable to — or better than — what they’ve historically received in the group market. As a result, major carriers like Ambetter and Oscar are investing heavily in ICHRA-focused solutions that better serve employers and employees alike. This includes expanded geographic reach while adding new benefits like diabetes management programs, rewards for healthy behaviors, and other incentives to attract and retain members. These products aim to match employees’ expectations for coverage that feels more similar to the group market plans to which they’re accustomed. These moves also signal how seriously carriers are taking the opportunity to serve the rapidly growing ICHRA market.

Technology investments aim to simplify enrollments

While ICHRA gives employees the flexibility to choose plans both on and off the Health Insurance Marketplace, off-exchange enrollments can still be challenging because they lack standardized 834 files. In response, leading tech platforms are innovating to streamline ICHRA adoption. HealthSherpa, the largest ACA health plan exchange, launched the HealthSherpa ICHRA Marketplace, offering integrations to simplify enrollments. ICHRA administration platforms are also investing heavily in payroll integrations, payments solutions, and greater transparency to make ICHRA feel as seamless and familiar as group health plans.

ICHRA is growing in all directions

Not only does ICHRA adoption continue to accelerate, but so do the size of companies deploying ICHRA, the number of brokers selling ICHRA, and the number of people interested in ICHRA.

• Between 2023 and 2024, ICHRA adoption grew by 29% overall, and 84% among Applicable Large Employers (ALEs).
• The number of brokers registered to sell ACA exchange plan coverage, including ICHRA, increased by 15% year-over-year.
• Our firm’s average deal size grew by over 93% in the past year, with 2025 interest from larger employers at an all-time high.

One-size-fits-none

One of ICHRA’s most powerful advantages is its ability to deliver personalized healthcare solutions. Traditional group plans often rely on one-size-fits-all benefits, supplemented by costly “point solutions” aimed at addressing specific needs like diabetes care or pediatric specialties. Yet many of these point solutions fail to deliver engagement or measurable value — a recent Willis Towers Watson survey found that 56% of employers experience low engagement, and 41% lack outcomes measurement.

With ICHRA, employers let their employees decide where to allocate their healthcare dollars. This means employees can pay for what they need and not what a portion of their company needs. For example, employees can:

• Choose a carrier that’s in network with the doctors of their choice.
• Select a plan that offers specialty care, such as diabetes support or pediatric dentistry.
• Use reimbursement dollars for non-premium medical expenses, including supplements to core coverage.

The result is a more efficient, cost-effective benefits model that delivers greater value for both employers and employees.

Regulatory certainty in 2025 and beyond

ICHRA’s bipartisan roots — born under the Affordable Care Act and implemented during the Trump administration — give it a rare level of political stability. While the incoming administration will likely bring changes to healthcare policy, ICHRA is well-positioned to endure.

While changes to ACA employer mandates, expansion of Health Savings Accounts (HSAs), and adjustments to premium tax credits could impact ICHRA, the overall outlook remains strong, supported by its bipartisan appeal and proven ability to deliver better, more flexible coverage.

Looking ahead

Moving into 2025, ICHRA adoption will continue to grow, driven by:

• Larger employers seeking more effective ways to control costs and support their diverse and disparate workforce.
• Brokers investing in new and innovative solutions to meet client needs.
• Carriers developing richer plans that deliver a more familiar “group-like” offering.
• Tech platforms enhancing the infrastructure to support seamless enrollment and administration.

With employers once again facing rising healthcare costs and employees demanding the personalization they’ve come to expect in all other aspects of their lives, ICHRA is uniquely positioned to meet both needs. By offering flexibility, cost control, and access to tailored coverage, ICHRA is reshaping the future of employee benefits — one investment at a time.

The message is clear: ICHRA isn’t just a trend — it’s a new outlook for an employee-centric benefits strategy that’s here to stay.