According to Zywave's 2024 Employer Survey, mitigating healthcare costs was one of the top three benefits challenges cited by employers. Health insurance brokers can help with this issue. In fact, the U.S. Chamber of Commerce reports that one of the biggest benefits employers get from working with a broker is that brokers can offer money-saving benefit options.
As a health insurance broker, you can gain a competitive advantage by offering your clients more options that save them money, while also addressing the other two top concerns identified on Zywave's survey: offering a competitive benefits package and retaining employees.
An ICHRA is one of those money-saving options. ICHRA stands for Individual Coverage Health Reimbursement Arrangement. Employers who offer ICHRAs provide workers with a stipend they can use to pay premiums for any qualifying health coverage they choose, or to pay for other qualifying medical costs.
When brokers offer ICHRAs, it benefits the broker, employers, and employees, so it's a win/win for everyone. Read on to learn why ICHRAs are such a great option worth offering.
Benefits for brokers of offering ICHRA plans
The cost of group health insurance plans has soared since 2010, with health insurance premium increases exceeding 50% for plans available to individual employees, employees and spouses, and employees plus dependents.
Unfortunately, high premiums have made it harder for companies to offer employer health insurance coverage. In fact, according to a survey of close to 600 small businesses conducted by the National Federation of Independent Business Members, 65 percent of companies that don't offer health insurance cited cost as the most important reason.
ICHRAs help employers better control costs. Health insurance brokers for small businesses can gain a significant competitive advantage by offering ICHRAs to clients seeking an affordable health benefits solution.
It's not just small businesses that can benefit, though. ICHRA offers other advantages as well. For example, ICHRAs simplify health coverage for geographically diverse employees, which may make these benefits options attractive to larger companies and enterprise businesses with complex structures.
Offering your employer clients more choice has few downsides, and ample upsides, especially as ICHRAs gain popularity and become more well-known as a health insurance solution.
Why employers prefer ICHRAs
There are good reasons a growing number of employers are offering ICHRAs. Employers who choose to provide this type of coverage have much greater control over how they structure employer-provided health insurance benefits. For example, companies offering ICHRAs can:
Determine which employees will be offered ICHRAs based on their employment classification.
Decide how large a stipend they want to offer, and how much to increase it each year, unlike group plans, where annual premium increases are outside their control.
Employers offering ICHRAs can also satisfy the employer shared responsibility provisions under the Affordable Care Act. Often referred to as "the employer mandate," these regulations require companies of a certain size to either offer qualifying healthcare insurance coverage to full-time employees, or make a payment to the IRS. Applicable businesses can avoid liability under the ACA employer mandate by offering their employees affordable health benefits via an ICHRA.
Employers of all sizes can also reduce the administrative burdens of selecting group plans to offer, as workers can use their stipend to pay for any qualifying policy or qualifying medical care expense they choose. Any small business health insurance broker knows that the time involved in reviewing traditional group plans is substantial and can place a large burden on smaller companies buying coverage for a limited number of workers.
Why employees benefit from ICHRAs
As a health insurance broker, your goal is to satisfy your clients. For companies, the goal is to offer a competitive benefits package that will attract top talent and improve employee retention.
The good news is ICHRAs can create significant value for employees, which means adding them to your offerings gives your clients access to an attractive health benefits option.
When employers offer ICHRAs, workers can choose any qualifying healthcare plan to apply their stipend to. This includes all plans sold on Healthcare.gov or state marketplaces, as well as eligible plans sold directly by private insurers.
Since the coverage is sold on the individual market, the plans are also portable. If an employee loses his job, he should be able to keep the exact coverage he has as long as the plan remains available on the individual market.
The employee will lose the contribution the company was providing, but since loss of job is a qualifying life event, they could choose to get the same coverage as an individual and potentially qualify for Affordable Care Act subsidies to defray the cost.
Since employees can research and select their coverage, they can also make sure the plan they pick offers the features most important to them, such as access to a specific doctor. This can provide better health outcomes, since people can find a plan that allows them continuity of care.
Market trends and growing demand
With so many benefits associated with ICHRA, it's not a surprise that demand for them is growing. The HRA Council's 2023-2024 Growth Trends report found ICHRA adoption was up 29% year over year from 2023 to 2024.
ICHRAs are also attracting support from lawmakers, who view them as a cost-effective means of expanding access to affordable health care. In May 2025, the U.S. House of Representatives passed legislation that would significantly enhance ICHRAs, including by creating new federal tax credit for the first and second year an employer offers an ICHRA. These enhancements are now under consideration by the U.S. Senate and, if enacted, would take effect by the end of 2025. Several states are also considering similar incentives following Indiana's 2023 enactment of a state-level tax credit for employers who offer ICHRAs.
As group health insurance costs continue to grow and developments in public policy drive incentives for ICHRA adoption, more companies will seek to maximize the value of their health benefits via an ICHRA. Any health insurance broker that offers this option can benefit from this rising demand.
How brokers can successfully offer ICHRA
Whether you are a small business health insurance broker or you cater to larger companies, adding ICHRA insurance to your offers is something worth thinking about. If you decide to move forward, though, you need to create the conditions for success.
You can do this by:
Educating clients on ICHRA benefits so they understand the potential cost savings and the added flexibility employees will enjoy
Partnering with tech platforms for easy administration of ICHRA benefits
Addressing common employer concerns, such as employee challenges with plan selection
Now is the right time to integrate ICHRAs into brokerage services
With major ICHRA enhancements on the horizon and open enrollment just around the corner, don't wait to integrate ICHRA into your brokerage services. Partner with Thatch to help your clients manage their ICHRA plans, comply with regulations, and enable employees to manage their benefits simply and effectively. Contact Thatch today to schedule a demo to learn more.
