Is an ICHRA the Missing Piece in Your Toolbox?

• August 10, 2026

By Danielle Winiecki

The challenges and complexities of the employee benefits arena have grown exponentially in recent years. Consider a scenario that is becoming increasingly frequent: A longtime client who runs a thriving small business calls you in a panic. For years, you’ve helped the business manage its benefits, but now it’s facing a 30% premium increase on its group plan renewal. It has also recently hired key employees in three different states, and its traditional plan is becoming a logistical and financial nightmare.

The client is stuck between a rock and a hard place: either absorb a cost it can’t afford or risk losing the very talent that fueled its growth. As its trusted advisor, you feel the pressure to find a solution that doesn’t exist in the traditional playbook.

This scenario isn’t an outlier. It’s a reflection of a market under pressure. Rising insurance costs are a major factor in suppressing employee wage growth, with businesses awarding pay raises that are, on average, 20% lower than planned, according to the Federal Reserve Bank of New York.

Yet, where there is a challenge, there is an opportunity. Adoption of individual coverage health reimbursement arrangements (ICHRAs) has increased by over 1,000% in the last five years, according to the HRA Council.

ICHRAs are health reimbursement arrangements in which employers can reimburse employees for some or all of the premiums the employees pay for health insurance they purchase on their own, according to HealthInsurance.org. For brokers, ICHRAs are another powerful tool to have in their toolbox.

Some employers still carry the misconception that plans on the individual marketplace are inherently inferior to group coverage. But the modern individual market offers a wide range of plan types and tiers from a variety of well-known carriers.

Understanding how to position ICHRAs allows you to move beyond the typical renewal conversation and offer an innovative, strategic solution. Here are three benefits of ICHRAs:

1) Budget predictability. ICHRAs replace the volatility of annual renewal negotiations with an innovative, defined-contribution model. Employers set a fixed, predictable budget for benefits, which shifts the conversation from uncontrollable premium hikes to sustainable, manageable costs.

2) Flexibility. Does your client have employees across different states? Does it rely on part-time or seasonal workers? Traditional group plans often fail these modern workforce structures. ICHRAs allow employees to purchase plans on the local individual market where they live, ensuring access to local providers and networks—all under a single, unified benefits strategy for the employer.

3) Talent management. In a competitive labor market, ICHRAs give employees access to the entire individual marketplace rather than two or three group plans. Employees can choose a plan that fits their personal health needs, family structure and budget.

A common hesitation among brokers and their clients is the perceived complexity of implementation. However, by partnering with a capable administrator, the burdens of setup, compliance and employee support can be streamlined. Advise your clients to prioritize partners who provide robust, easy-to-use decision-support tools. The best platforms offer features that allow employees to compare plans based on total estimated costs and search for in-network providers, simplifying what can otherwise be an overwhelming process.

Equally important is managing the employee experience. Clients should emphasize that this innovative approach gives employees the flexibility to choose a plan that fits their lives, rather than being forced into a one-size-fits-all group model. Providing access to knowledgeable specialists who can help employees break down their options will build confidence and ensure a smooth transition.

Danielle Winiecki is director of business development for Individual Coverage Health Reimbursement Arrangements (ICHRA) at Ambetter Health.