Open enrollment season always brings a moment of truth—a snapshot of where employees are placing their trust, how benefits strategies are performing, and what trends are quietly reshaping the health insurance landscape. This year, as we analyzed our 2026 enrollment data at Zorro, we saw patterns that not only validate our approach but also illuminate where the ICHRA market is heading in this pivotal moment.
With the number of participants on our platform growing 3x from 2025 to 2026, our data offers a ground-level view of how real employees are navigating ICHRA benefits—and the picture is more encouraging than the headlines might suggest.
The Big Picture: Growth Amidst Uncertainty
Let's acknowledge the elephant in the room: 2026 has been challenging for the individual market. Premium increases averaging 23% nationwide, the expiration of enhanced subsidies, and rising out-of-pocket maximums created an undeniably difficult environment. Many in the industry questioned whether ICHRA could weather this storm.
Our enrollment data suggests not only can it weather the storm—it's thriving because of the flexibility it provides.
We saw robust growth with our platform expanding 3x year-over-year. This growth aligns with broader industry trends showing ICHRA adoption increasing 34% among large employers and 52% among small employers year-over-year.
The Coverage Sweet Spot: Employers Are Getting It Right
One of the most striking findings in our data is how well employers are calibrating their ICHRA contributions. Nearly 60% of our enrolled employees have more than 75% of their premium covered by their employer allowance. Another 30% have between 50-74% covered.
This matters immensely. When we talk about ICHRA "affordability" in the regulatory sense, we're referring to whether the employee's out-of-pocket cost for the lowest-cost silver plan exceeds 9.96% of household income. But true affordability—the kind that makes employees feel supported—goes deeper. It's about whether the contribution feels generous, whether it provides real choice, and whether employees can access quality coverage without financial strain.
Our data shows employers using ICHRA aren't just checking a compliance box. They're crafting contribution strategies that demonstrate genuine investment in employee wellbeing. That 59.4% figure—the percentage receiving >75% premium coverage—tells a story of employers who view ICHRA as a strategic benefit, not a cost-cutting maneuver.
Employees Are Choosing Quality Coverage
Another powerful insight: 40% of our participants selected Gold-tier plans, while another 30% chose Bronze and 24% chose Silver. Only 6% selected Platinum.
This distribution reveals sophisticated consumer behavior. Employees are weighing their options thoughtfully, considering their health needs, financial situations, and family dynamics. The strong showing for Gold plans—which typically offer the best balance of premiums and out-of-pocket costs for people who use healthcare regularly—suggests employees appreciate having the agency to invest in comprehensive coverage when they need it.
Compare this to traditional group plans, where employers make tier decisions for entire populations. ICHRA's promise has always been personalization, and our data validates that employees leverage this flexibility meaningfully. They're not all racing to the cheapest option—they're making informed choices aligned with their circumstances.
The Network Preference Reality Check
Plan type selection also revealed interesting patterns: 53% of participants chose HMO plans, 31% selected PPOs, 12% opted for EPOs, and just 4% chose POS plans.
The strong HMO preference initially might seem counterintuitive—haven't we been told employees crave PPO flexibility? But this reflects the current market reality. While in some regions, PPOs might be less readily available, this doesn’t mean that HMO selection is a default. In many instances, HMOs offer the most cost-effective path to comprehensive coverage, especially when employees are spending their own dollars (even if reimbursed). Employees are demonstrating they're willing to accept network limitations in exchange for affordability—a rational trade-off that speaks to their engagement with the decision-making process.
Retention and the Loyalty Question
Perhaps the most validating metric: 32% of returning employees stayed with the exact same carrier and plan year-over-year. Another 23% stayed with their carrier but changed plans. That's a 55% carrier retention rate in an environment where premiums jumped significantly and employees had every incentive to shop aggressively.
This retention tells us several things:
- First, decision support matters. When employees have the right tools and guidance to evaluate their options annually (something Zorro invests heavily in through AI-powered decision support), they can make confident choices—including the choice to stay put when it makes sense.
- Second, employees value continuity. Despite the flexibility ICHRA offers, most employees aren't chasing the absolute lowest premium each year. They consider provider networks, prescription formularies, and the hassle of switching. This stability benefits everyone—employers, employees, and the healthcare system.
- Third, the switching that does occur is purposeful, not chaotic. The 26% who changed carriers weren't abandoning ship—they were exercising the choice ICHRA promises, shopping for better value or coverage that better fit their evolving needs. This is fundamentally different from traditional group plans, where research shows only 2.3% of employees actively switch plans for quality or cost reasons—not because they're satisfied, but because most lack any choice at all.
Why ICHRA Still Makes Sense in 2026 (and Beyond)
The data makes us optimistic, but let's address the concerns head-on.
Yes, 2026 brought rate increases. But historical data shows individual market trends consistently growing at a lower rate than group trends. The 2026 spike is an aberration driven by specific policy changes—not a structural flaw in the individual market.
Yes, enhanced subsidies expired. But this actually makes ICHRA plans all the more viable. With employer contributions providing reliable, tax-advantaged support, ICHRA participants are insulated from subsidy uncertainty in a way individual market shoppers without employer support are not.
And yes, the market faces challenges. But employer commitment to ICHRA tells a different story. According to the HRA Council, 92% of employers who offered an HRA last year continue to do so in 2025—demonstrating that once employers experience ICHRA's benefits, they stick with it. This is particularly remarkable given that McKinsey research shows nearly two-thirds of employers with traditional group plans are considering switching carriers within the next four years. ICHRA isn't just a stopgap—it's a durable solution that employers are betting their benefits strategies on for the long term.
The Zorro Difference: Making Complexity Human
Our enrollment data doesn't just reflect market trends—it reflects our specific approach to ICHRA administration. We've built Zorro on the belief that modernizing benefits requires both technological innovation and human-centered design.
Every enrollee on our platform interacted with our AI-powered decision support tools that help them understand their options without drowning in jargon. They accessed our plan comparison tools that show, in plain language, how different metal tiers and networks affect their wallets and care access. They had real humans available to answer questions when technology couldn't bridge the gap.
The thoughtful metal tier distribution, the strong retention—these outcomes aren't accidents. They're the result of meeting employees where they are: sometimes confused, often skeptical, always busy, and deeply deserving of benefits that work for their lives.
Looking Forward: The ICHRA Inflection Point
The ICHRA market is at approximately 500,000 to 1 million covered lives—tiny compared to the 150+ million in traditional employer-sponsored coverage, but growing rapidly. Industry observers note we're approaching the "chasm" between early adoption and mainstream acceptance, and the next few years will determine whether ICHRA crosses it.
Our 2026 data makes us believers that it will. Not because ICHRA is perfect—no benefits model is—but because it addresses real pain points that group coverage struggles with: cost predictability for employers, personalization for employees, and adaptability as workforces and healthcare markets evolve.
Brokers and HR leaders navigating 2027 planning should take note: the employers who dove into ICHRA in 2024 and 2025 aren't backtracking in 2026 despite premium pressures. They're refining contribution strategies, improving communication approaches, and leaning into the model's advantages.
The Bottom Line
Our 2026 enrollment data tells a story of resilience, thoughtful plan design, and employees rising to the challenge of consumer-directed healthcare when given the right support. It validates our conviction that ICHRA, delivered with real consultation and genuine decision support, represents the future of employer-sponsored benefits.
The journey won't be linear—2026 reminded us of that. But as we look at over 90% of employees having 50%+ of premiums covered, 40% selecting Gold-tier coverage, and 55% retention rates despite market turbulence, we see an approach that's working for real people in real life.
And ultimately, that's what matters most. Benefits should be about people—their health, their families, their peace of mind. Our 2026 data suggests we're on the right track.
Want to explore whether ICHRA might work for your organization? Zorro's team combines deep ICHRA expertise with AI-powered tools and human support to design solutions tailored to your workforce. Let's talk.
