Individual coverage health reimbursement arrangements (ICHRAs) are climbing the agenda of US benefits brokers and their employer clients, but the industry's leading researcher on employment-based health benefits is sounding a note of caution that deserves to sit at the center of every broker conversation about the product.
Paul Fronstin, Ph.D., director of health benefits research at the Employee Benefit Research Institute (EBRI) in Washington, D.C., told Insurance Business Benefits US (IBB) that the risk that ICHRA shifts onto employees is more immediate, and potentially more consequential, than almost anything else in the defined contribution benefits playbook.
"When employers went from defined benefit to defined contribution retirement benefits, they basically shifted the risk of investment and longevity from the employer to the employee," he said. "With health benefits, going from the system we have now to an ICHRA also shifts risk onto employees. But if they make the wrong decision on the health plan, that could impact their health. It could impact their access to healthcare."
While a 30-year-old who makes a poor investment decision inside a defined contribution retirement plan has roughly 35 years before the consequences become apparent – or to correct it - a worker who selects the wrong health plan in an ICHRA may feel the impact within months until the next open enrollment arrives.
"Hopefully it doesn't have dire consequences," Fronstin said. "But in some cases it might."
The risk-shifting question is landing against a backdrop of rapidly rising employer interest in ICHRAs; interest that Fronstin and his EBRI colleagues are measuring carefully and tempering with historical perspective.
At a September 30, 2026, webinar co-hosted by EBRI and Morgan Health, a division of JPMorgan Chase, Fronstin presented findings from the EBRI-Morgan Health ICHRA Employer Survey, which gathered responses from nearly 1,000 benefit decision-makers across large employers (defined as those with 100 or more employees) and small employers, including those not currently offering coverage. The survey was conducted in spring 2026.
Read next: Half of brokers still haven't sold an ICHRA and the gap is showing
Initial findings on adoption intent appeared striking. But Fronstin told webinar attendees that a closer reading of the data told a more measured story: when the analysis was refined to focus on employers who had not previously heard of ICHRAs and who were not already planning to adopt one, the figures dropped sharply, often into the single digits by employer size, with only the smallest segment of larger employers, those with between 100 and 500 employees, registering likely adoption rates in the low teens.
"I don't know that they will adopt ICHRAs in the next one to two years," Fronstin said at the webinar. "I think that this slide basically represents some frustration with health benefits and wanting to do something different."
The parallel he draws is instructive for brokers. Shortly after the Medicare Modernization Act created health savings accounts (HSAs) more than 20 years ago, a survey of large employers found that 73 percent said they would be offering an HSA within two years. It took closer to a decade for large-employer adoption to materialize at scale.
"It's barely gotten off the ground," Fronstin told Insurance Business Benefits US of ICHRAs. "Most trends and benefits take off like an airplane, not like a space shuttle."
Adding another curveball to the story is that on September 3, 2026, the Small Business Administration (SBA) and Centers for Medicare and Medicaid Services (CMS) announced that individual coverage health reimbursement arrangements (ICHRAs) will now be marketed as CHOICE Arrangements.
Fronstin pointed to the private health insurance exchange wave of roughly 15 years ago as a more instructive precedent than HSAs for understanding how ICHRA adoption among large employers is likely to unfold.
In his conversation with IBB he noted that when Darden Restaurants and Sears were among the first large employers to announce a move to private exchanges, the news generated attention. But it was Walgreens (with approximately 170,000 employees) announcing its shift to a private exchange that made front-page news in the Wall Street Journal and triggered a broader employer rethinking of the model.
"I think with ICHRAs, you're going to need an employer like that to come out and get the publicity around that kind of move," Fronstin said. "And that'll move a market because that'll get other employers' attention."
He described the dynamic in characteristically direct terms: "Nobody wants to be first. Someone's got to be first, but nobody wants to be third."
The HRA Council has found that most ICHRA growth to date has occurred among smaller employers that had never previously offered health benefits - creating new coverage rather than replacing existing group plans, Fronstin noted at the webinar. The survey found that employers currently not offering coverage viewed ICHRAs primarily as a pathway into the benefits market altogether, while employers already offering coverage emphasized employee choice as the primary draw.
The EBRI-Morgan Health survey found that nearly 80 percent of employers said they would be more likely to adopt an ICHRA if their broker recommended it and a similar proportion said peer adoption by a comparable organization would move them. Michelle Basta, vice president of healthcare innovation at Morgan Health in New York, told webinar attendees that brokers represent the difference between employer interest and employer action.
"They really trust a recommendation from an advisor," Basta said. "We know that that can be the difference between interest and implementation."
For Fronstin, the broker's role extends beyond the sale. The technology infrastructure around ICHRA has matured significantly with decision support tools, payroll integration, and AI-assisted plan selection closing gaps that made the product genuinely difficult to administer and navigate in its early years.
Ben Light, vice president of partnerships at Zorro, an ICHRA administration platform, told webinar attendees that 84 percent of employees using Zorro's decision support tool during the most recent open enrollment were able to select a plan without speaking to a live person, up from 75 percent the prior year.
"The technology caught up to the concept," Fronstin told Insurance Business Benefits US; a point he has made consistently about ICHRAs as the reason a product that has existed in theory for years is only now approaching a genuine inflection point.
But technology does not eliminate the underlying uncertainty of health insurance, and Fronstin is careful not to overstate what decision support tools can resolve. Even with access to prior year claims data and AI-assisted analysis, an employee cannot predict a broken leg, a new diagnosis, or a course of physical therapy that wasn't on their radar at enrollment.
"Insurance still has an insurance component to it," he said. "Where you can't predict everything that's going to happen. If you could, we wouldn't need insurance."
That irreducible uncertainty is precisely why brokers have a sustained advisory role to play - not just at implementation, but through ongoing employee education campaigns that move beyond the annual open enrollment window. The Society for Human Resource Management (SHRM) has documented that benefits education and employee communication remain among the most valued broker services for small and mid-sized employer clients navigating complex plan design decisions.
"In a typical employer, there's one meeting a year - it's open enrollment," Fronstin said. "That's when you talk about benefits and changes, and then you don't talk about it again for another year. This is something you could do on a grand scale multiple times during the year."
Fronstin did not shy away, in the IBB interview, from the broader structural question that ICHRA raises for the employment-based system.
If employer frustration with rising health costs eventually tips enough large plan sponsors toward exiting group coverage altogether, the downstream consequences for workers - who would face an individual market with even less leverage than employers currently hold - could be significant. That trajectory, he suggested, is one of the forces that could eventually push the US healthcare debate toward more fundamental reform.
For now, brokers occupy the critical position between employer interest and employee outcome. The EBRI research makes clear that the ICHRA opportunity is real, but so is the obligation to ensure that the risk transfer it represents is one that employees are genuinely equipped to navigate.
"There's no way to get it to just - you may not get it exactly right because of this uncertainty," Fronstin said. "That's the nature of choosing a health plan."
The EBRI-Morgan Health ICHRA Employer Survey findings and the full webinar recording are available at ebri.org.
