Employers are beginning to see the value of individual coverage health reimbursement arrangements (ICHRAs), managed care insiders tell AIS Health, a division of MMIT. Brokers and third-party experts say that while uptake has been slow so far, the ICHRA market could take substantive amounts of business away from both self-funded and fully insured commercial insurance books, particularly among medium-sized employers.
ICHRAs allow employers and employees to purchase Affordable Care Act marketplace plans. Employees select a plan on a health exchange or through a private broker, and their employer reimburses the member each month for a fixed amount of premium. Unlike exchange plans purchased by individuals, exchange plans purchased as part of ICHRA are not subsidized by advance premium tax credits. The market is still in its infancy: ICHRAs were created by the Trump administration in 2019, and the first policies in the segment were sold for the 2020 plan year.