Popularity of ICHRA and QSEHRA rapidly increasing among employers of all sizes

Individual Coverage and Qualifying Small Employer Health Reimbursement Arrangements continue to surge in popularity. Overall adoption of health reimbursement arrangements is up nearly 30% over 2023, according to the 2024 Growth Trends in ICHRA & QSEHRA report from the HRA Council.

“Not only are a majority of small employers able to offer health insurance for the first time, a majority of their employees have never had their own health insurance,” said Robin Paoli, executive director of the council. “ICHRA and QSEHRA are enabling more Americans to choose quality, Affordable Care Act-compliant health plans with mental and behavioral health care and other essential benefits.”

Although small employers continue to be the largest cohort, with 84% of new adopters now able to offer health insurance to employees for the first time, the number of large employers choosing ICHRAs also has increased by 83%.

“While there’s steady growth for QSEHRAs among small employers, the growth trajectory for ICHRAs continues to climb since its inception, along with adoption among large employers,” the report said. “Statistically significant ZIP code data are featured for the first time in the report, with heat maps showing adoption to demonstrate how HRAs solve for modern teams of remote and hybrid workers, as well as for growing companies with multiple locations.”

The report shows that 60% of employees choose either a gold or silver plan, often with enriched benefits, while approximately one-third select bronze plans. which often come with a Health Savings Account option. Workers are becoming well-informed health insurance consumers, the report said, assessing a variety of plans with their local doctors and hospitals in-network and choosing the best health insurance coverage for themselves and their families.

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Two strong trends reflected in the report are employee satisfaction and younger employees gaining access to care:

• First, after a company adopts an ICHRA or QSEHRA, it tends to keep it, in part because employees are able to select health insurance with personally significant options.
• Second, ICHRA and QSEHRA continue to bring younger lives into the national risk pool, with approximately two-thirds of employees being under age 45. Because dependents often are younger than covered employee, families coming into the individual plan marketplace through HRAs are lowering the average age and strengthening the risk pool.

“The long-term trends are becoming clear,” the report concluded. “ICHRA and QSEHRA are a success story nationwide for modern employers of all sizes and increasingly distributed workforces. Large employers have taken note. The future is ICHRA, and it’s starting now. As of 2024, ICHRA adoption is nearly on par with QSEHRA adoption. Given ICHRA’s flexibility and increasing uptake for larger employers, the HRA Council anticipates even larger growth in the coming years.”