ICHRA: The Consumer-Driven Shift Health Plans Can’t Ignore
Healthcare consumers are increasingly demanding choice and control, and health plans are under growing pressure to adapt. In the 2025 HealthEdge® Healthcare Consumer Study, 60% of individuals with employer-sponsored coverage reported that they would likely participate in an Individual Coverage Health Reimbursement Arrangement (ICHRA) if offered.
This reflects a broader shift toward consumer-directed benefits and a clear expectation for flexibility.
What is ICHRA and Why Is It Important to Health Plans?
An ICHRA allows employers to reimburse employees for the cost of individual market coverage, offering tax advantages for both parties. Employees can shop for plans that best meet their personal needs, while employers gain cost predictability and the ability to tailor contributions by employee class or geography.
Since being introduced in 2020, it’s no surprise that ICHRAs have gained traction with employers seeking alternatives to traditional group plans, especially as benefit needs become more varied across today’s workforce.
ICHRA Adoption is Accelerating
Recent data points to a sharp rise in ICHRA adoption. According to HRA Council’s 2024 report, “Overall adoption of HRAs is up nearly 30 percent over 2023, with an 83 percent increase in large employers choosing ICHRA. Small employers remain the largest cohort, with 84% of new adopters now able to offer health insurance to employees for the first time.”
In addition, more than 200,000 U.S. employees are currently offered an ICHRA or Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) based on HRA Council member data. The estimated total market size, including all administrators and dependents not captured in the core employee data, is approximately 500,000 individuals covered through an ICHRA or QSEHRA as of 2024.
In addition, health benefits technology companies are responding with significant investment. In 2024 alone, several ICHRA-focused startups secured major funding, underscoring the growing momentum behind this model.
The Survey Signal: Healthcare Consumers Want More Choices
As mentioned above, the HealthEdge 2025 Healthcare Consumer Study found that 60% of respondents with employer-based insurance would likely opt into an ICHRA if offered. With 3 in 5 healthcare members showing interest in this type of option, there is undoubtedly a strong desire for personalization, flexibility, and control over health coverage decisions.
Healthcare consumers increasingly compare their health plan experience to retail and digital services they use every day, like Amazon or Uber. They expect a seamless, convenient, and tailored experience—regardless of whether they’re enrolled through a group offering or an individual marketplace.
The Challenge for Traditional Health Plans
While ICHRAs open new doors for employers and employees, they introduce meaningful disruption for traditional health plans. Among the key challenges:
- Fragmented risk pools: Younger, healthier employees may shift to individual plans, leaving a more costly group population
- Disrupted enrollment patterns: Members shop across carriers, reducing predictability
- Pressure to deliver more flexible, consumer-centric products: Health plans must offer value beyond network access and price
To remain competitive, health plans must enhance the value they bring across plan types and ensure they can deliver the experience consumers expect—regardless of coverage model.
How HealthEdge Helps Health Plans Compete in a Choice-Driven Market
The integrated HealthEdge platform equips health plans with the tools they need to meet today’s healthcare consumer expectations, especially in environments where members are empowered to choose from multiple coverage options, like ICHRA.
GuidingCare® delivers robust care management and utilization management capabilities that support all members, whether they are part of a traditional group plan or an individual-market plan. It enables care coordination, case management, and personalized engagement across settings, helping plans maintain strong clinical connections even as enrollment models shift.
Wellframe
brings a digital front door to every member experience. With mobile-first communication, care navigation tools, and personalized health content, Wellframe keeps members connected to their health plan, even when that plan was selected individually through an ICHRA. It enables health plans to deliver the kind of real-time, user-friendly experience that healthcare consumers now expect.
Together, HealthEdge solutions give health plans the ability to:
- Offer consistent, high-touch support across coverage models
- Personalize engagement at scale using data-driven insights
- Strengthen member relationships in a competitive, choice-driven environment
- Provide value beyond benefits selection—building trust, loyalty, and improved outcomes
By investing in these tools, health plans can position themselves as partners in care, regardless of how members enroll.
To better understand how healthcare consumers are thinking about coverage, choice, and the role of their health plans, explore the full findings in the 2025 Healthcare Consumer Study. It offers data-driven insights into member perceptions and priorities that can help health plans navigate a rapidly changing benefits landscape.
