The federal ICHRA regulations created a mechanism that employers can use to provide cash that employees can use to buy their own major medical coverage from individual health coverage issuers, either through an Affordable Care Act public exchange or through the off-exchange market.

The regulations came out in 2019, shortly before the COVID-19 pandemic was about to put ordinary benefit plan innovation on hiatus. Back in March 2020, before the COVID lockdowns occurred and employers understood what was about to hit them, Take Home reported that early ICHRA formation was strongest in states with health individual coverage markets, including California, Florida, Oregon and Texas.

The strength of a state's individual market plays a role, and the strength of the individual market often varies widely from place to place within a state, according to Tanner Dobbs, a vice president at Take Command.

"Texas is a good example," Dobbs said. "Rural Texas isn't always the most ICHRA-friendly option."

But Austin, Texas, and the Dallas area are strong ICHRA markets, Dobbs said.

Dobbs and Estep noted that the fact that investment firms and insurers like Oscar Health and Centene are excited about the ICHRA market is leading to rapid growth in ICHRA option menus.

Related: Oscar Health going all in on ICHRAs

There may now be about 15 ICHRA programs now available, Estep said.

"I think it's great," Estep said. "I think we need competition. I do also think, though, that in the next call it three to five years, we'll see that consolidate back down."

Another cloud on the horizon is the possibility that workers may end up seeing a shift to ICHRAs as a way to weaken employers' health benefits programs.

In Washington today, for example, one concern of the federal employees now being squeezed by Trump administration cost-cutting efforts is speculation that the federal government could try to replace the employees' current Federal Employees Health Benefits Program with a more limited, voucher-based benefits program, which might, in some ways, resemble an ICHRA program.

Dobbs said one source of friction for Take Command is many employers' keen interest in making sure that a shift to an ICHRA plan will really increase flexibility for the employees, not hurt the quality of the employees' coverage.

For many employers, the employees feel like family, Dobbs said.

"We sometimes get pulled down into, 'Well, this one employee has this child that receives this treatment, and if that won't be covered with these plans, we can't move forward as a company,'" Dobbs said.

That means part of the process of shifting an employer to an ICHRA program often means showing the employer that the program will meet the needs of employees with serious health problems or specialized health care needs, Dobbs said.

Still another factor shaping the future of the ICHRA market will be policy changes in Washington and state capitals.

The Take Command executives say that they think the policymakers in place in Washington now like ICHRAs, and they noted that Indiana recently created a tax credit that will help small employers that adopt ICHRA programs.

"I don't know that any other state has adopted that yet, but I do know it's in play and in discussion in a number of states," Estep said. "So we might at the state level see some continued momentum to encourage exploration and adoption of these HRA models," said Dobbs.