Since launching in 2020, ICHRAs have emerged as a viable, cost-effective alternative to traditional group health plans. ICHRAs enable businesses to provide employees with a tax-free financial contribution as reimbursement for individual health insurance premiums and qualified medical expenses.

In the long term, the Congressional Budget Office projects continued growth, with 2 million people expected to be covered through ICHRAs by 2032.

“We’re seeing significant time and financial investments from carriers, brokers and investors, all of whom appear incredibly bullish on ICHRA,” says Ben Light, Vice President of Partnerships at Zorro. “This supports expanded product offerings, deeper technology integrations and an all-around more efficient experience. These investments position 2025 to be another year of tremendous growth for ICHRAs.”

As benefits advisors and consultants prepare for 2025, four key trends are shaping the future of ICHRAs, including better plan designs, additional savings for employees and employers, technology innovations and bipartisan governmental support for offering more health care options to small and mid-sized organizations.

ICHRA trends to watch in 2025

1. More – and better – plan designs

With increasing ICHRA adoption, carriers are offering richer plan designs and expanding to more states. For example, in 2025, Ambetter Health will roll out Ambetter Health Solutions, to help individuals offered an ICHRA by their employer access affordable ACA plans. This product will initially launch in select states, including Georgia, Indiana, Mississippi, Missouri, Ohio and South Carolina, with plans to expand to additional states in the future.

The expanded plan options are designed to meet employee expectations by mirroring traditional group coverages. As a result, brokers and employers can now offer comparable employee coverage options when transitioning to an ICHRA strategy.

With an ICHRA, employees can tailor the coverage to fit their needs, such as opting for a lower deductible or out-of-pocket maximum in exchange for a higher premium. Data show that employees respond well to having this choice. Zorro’s 2025 enrollment data reveals that employee benefits selections are spread evenly across:

• HMO – 38 percent
• EPO – 31 percent
• PPO – 28 percent

By adding ICHRA to the mix, brokers give their clients and their employees greater control of their plans.

2. Opportunities for significant savings

As carriers offer more ICHRA plans and more employers look to adopt these plans in 2025, the risk pool will continue to strengthen. More people accessing coverage through the individual health plan market creates downward pressure on rates and greater opportunities for savings.

Better rates, however, are not the only opportunity brokers should highlight for clients. With ICHRAs, employers can effectively transfer the risk of unexpected rate spikes. ICHRAs eliminate the impact of high-cost individuals on group renewal rates by dispersing the claims risk across the entire individual market which now has over 22.4 million enrollees.

3. Increased technology investment and innovation

The projected ICHRA growth over the next 12 months will be met with significant technology investments to make the end-to-end process easier and more “group-like” for brokers, employers and employees. Potential enhancements include streamlined quoting, implementation, enrollment and administration processes.

Additionally, there is significant investment being put into deeper data and systems integrations between ICHRA platforms, carriers, Human Resource Information Systems (HRIS), payroll and enrollment platforms. Such advancements are making ICHRAs more accessible and easier for brokers to offer, especially to large group clients and groups with diverse workforces across multiple locations.

“Technology can be a true differentiator for brokers recommending ICHRAs,” says Lars Parkin, Director of Sales at Warner Pacific Insurance Services. “Tech platforms like Zorro are investing in real-time quoting, seamless onboarding and enrollment and transparent administrative tools that make offering ICHRAs a more seamless experience for me and my clients.”

4. Governmental support for market-based solutions

Since their inception, ICHRAs have garnered strong bipartisan support. The incoming Trump administration’s backing of market-based solutions that promote health care choice and competition is expected to foster additional growth.

The new administration may also seek to codify ICHRA regulations into law, providing additional stability and clarity for employers considering the option.

At the same time, broker consultants and their clients should monitor potential changes to the Affordable Care Act (ACA) rules under a new Congress and the incoming administration, which may also impact ICHRAs.

In the year ahead, brokers and consultants can count on expanded ICHRA options, savings opportunities, technology advances and continuing bipartisan support to drive the viability of ICHRAs as a cost-effective, flexible health care solution for employers of all sizes.

CTA: Contact Zorro to learn more about how they make it easier for you to quote, sell and deliver ICHRAs.

Ann Clifford is a freelance writer who translates her background in financial services marketing into specialized content focused on employee benefits and small business topics.