Large employers are the fastest-growing segment of a benefits model that barely existed six years ago. More than 20,000 US businesses now offer a health reimbursement arrangement as their primary employee health benefit, a 53 percent jump from 2025, according to the HRA Council's latest Growth Trends for ICHRA & QSEHRA report. The report draws on anonymized data from 17 HRA Council member organizations.
The headline finding is not the overall adoption number. It is who is driving it. Applicable large employers, those with 50 or more full-time equivalent employees, are now the fastest-growing segment of the market.
Their adoption rate more than doubled year-over-year. That is a notable shift for a product often associated with small employers who could not otherwise afford group coverage.
Under an individual coverage health reimbursement arrangement (ICHRA), employers set a fixed monthly contribution. Employees use it to buy their own coverage on the Affordable Care Act (ACA) marketplace or another exchange. The employer's benefit cost becomes predictable.
The employee's coverage travels with them and fits their circumstances rather than a plan chosen for the whole workforce.
The HRA Council's 2026 report goes beyond adoption numbers to examine how employees are actually using their ICHRAs. The picture is more varied than a simple cost-control story.
More than half of enrollments are by workers under 45, and most are choosing Silver and Gold tier plans. Some employees add more than $100 per month of their own money above the employer allowance to secure richer coverage.
Others choose plans with premiums below the employer contribution and use the surplus on other approved medical expenses. That range of behavior suggests employees are engaging with the individual market as active buyers rather than passive recipients.
It also points to a navigation problem. A worker choosing between dozens of plans across multiple metal tiers in an unfamiliar marketplace needs support the traditional group enrollment process never required.
"ICHRA is a compelling choice for employers of all sizes," said Robin Paoli, executive director of the HRA Council. "Even in a year of challenges for employers and the individual market, the HRA ecosystem is growing and scaling, covering more Americans and strengthening the risk pool for the ACA marketplace."
The 2026 plan year was not without headwinds. The expiration of enhanced Advance Premium Tax Credits, which had subsidized ACA marketplace premiums since 2021, made individual market coverage more expensive for many workers. ICHRA adoption grew through those pressures regardless.
The small employer picture in the report is worth separating from the large employer story. More than two-thirds of small businesses now offering an ICHRA previously provided no health coverage at all. Nearly a third moved from the small group market.
For those employers, the ICHRA is a first step into benefits, rather than a replacement strategy. For large employers, it is a deliberate structural choice: exiting the group insurance market and shifting coverage decisions to employees.
That transition carries compliance obligations. Under ACA rules, ALEs offering an ICHRA must make it affordable based on the lowest-cost Silver plan in the employee's area. They cannot offer an employee a choice between an ICHRA and a traditional group plan within the same employee class.
As mentioned, the report draws on 17 member organizations. It does not capture the full market. Total adoption may be higher than shown. The HRA Council separately estimates that ICHRA-covered lives alone surpassed 500,000 at the start of 2026, separate from the employees covered by Qualified Small Employer HRAs, or QSEHRAs, available only to employers with fewer than 50 employees.
The large employer adoption data suggests ICHRAs are becoming a benefits strategy question, and not only a cost-control response. An ALE that doubles its ICHRA adoption year-over-year is rethinking how it delivers and administers health benefits at scale.
That creates both a risk and an opportunity for benefits brokers. Some ICHRA platforms operate as hybrid vendor-brokers and can displace the licensed broker in the client relationship. But employers moving to a defined contribution model still need help with contribution strategy, employee class design, affordability calculations, and ongoing compliance.
That work is not smaller than a group plan renewal. It is different. Brokers who understand ICHRAs from the employer's side are better placed to stay in those client relationships as more large employers consider the transition.
State policymakers are also signaling where this is headed. The National Conference of Insurance Legislators (NCOIL) unanimously approved model legislation at its May 2026 Spring Meeting, giving states a framework to offer nonrefundable tax credits to small businesses that choose an ICHRA over a traditional group plan. Indiana and Mississippi have already enacted versions. Ohio, Connecticut, and Arizona have bills in progress.
The model leaves the credit amount to each state's discretion. But the direction is clear: lawmakers across party lines are treating ICHRAs as a coverage access tool rather than a fringe alternative. That policy momentum, combined with persistent group premium pressure, points to a larger pipeline of employers weighing the transition through 2027 and beyond.
