Let’s Clear Up One of the Biggest Misconceptions in Benefits: ICHRA isn’t just for small businesses
By Andy Stein, Founder & President, The Worksite Group
You’ve probably heard this in one of your client conversations: “Isn’t ICHRA just for small businesses that can’t afford real group health insurance?”
It’s an outdated idea that’s costing employers—especially mid-sized and larger ones—opportunities to solve real problems.
Here’s what’s actually happening.
The Data Doesn’t Lie
ICHRA adoption among large employers jumped 34% from 2024 to 2025. Not small businesses. Large employers.
When trends like these start popping up, we can bet that the market rationale is driving adoption. Strategic-thinking CFOs and benefits leaders have done the math and realized traditional group health isn’t the only game in town anymore.
Why Large Employers Are Making the Switch to ICHRA
Getting Off the Renewal Rollercoaster
This great article from Peterson-KFF quotes a Chief Medical Officer who was experiencing 25-30% renewals. Then year three? A 47% increase. Asking for relief from the traditional carrier didn’t help; because of chronic illnesses within the employee pool, the carrier told the team that they’re still “shouldering losses” on behalf of the employer.
We’ve heard similar stories from brokers talking to clients who need help. That kind of budget hit is just not sustainable.
When you’ve got 100, 200, or 500 employees, one or two people with serious ongoing medical conditions can seriously affect your options. The carrier underwrites your client’s specific group, and suddenly, they’re staring at increases that make them question whether they can even stay in business.
ICHRA flips that script. The employer sets the contribution. The employees buy individual market plans that don’t vary based on anyone’s health status—just age, and even that’s capped at a 1:3 ratio. You can get your client out of the business of unreasonably high renewals when someone on their team gets sick.
Having this cushion protects both the business and the broader employee base from unsustainable cost spikes.
ICHRA Compliance That Actually Works
If you’re employing over 50 full-time employees, you’ve still got ACA requirements. ICHRAs meet them, as long as your contribution makes coverage affordable—meaning the employee’s cost for the lowest-cost Silver plan doesn’t exceed 9.02% of their income in 2025.
This isn’t some sketchy workaround. It’s a legitimate compliance strategy that’s been around since 2020 and is only getting stronger policy support. The 2025 CHOICE Arrangement Act is working to make ICHRAs permanent. States are introducing incentive frameworks. This isn’t going away.
Solving the Complicated Workforce Problem
Your clients have remote employees in eight states. Or seasonal workers. Or they’re acquiring new entities every quarter and trying to bolt them onto existing benefits structure.
Traditional group plans weren’t built for that. Carriers limit their footprints. Minimum participation requirements make it hard to include part-timers. Adding a new entity takes months of setup.
ICHRAs let you create classes—full-time, part-time, salaried, hourly, different locations—and set appropriate contributions for each. That’s the difference between benefits that scale with your business and benefits that hold you back.
“But What About the Downsides to ICHRA?”
Look, I’m not going to pretend ICHRAs are perfect for everyone. They’re not. Here are a few legitimate reasons why your client may need a different choice.
Network Concerns Are Real
Most individual market plans are HMOs or EPOs—no out-of-network coverage outside emergencies. If your employees are used to PPOs with broader networks, that’s an adjustment.
But here’s what’s changing: Insurers focused on the ICHRA market are starting to offer off-exchange individual plans with PPO networks that look more like traditional group coverage. It’s not available everywhere yet, but the market is responding.
You need to look at what’s available in your specific area. If the networks mimic your client’s benefit offerings, it could be a good fit. If they don’t, an ICHRA might not be the right move right now. It may hurt your credibility to pretend otherwise.
Employees Need Support
Can your employees navigate dozens of plan options and make good decisions?
Honestly? Not without help.
That’s why the ICHRA vendors who know what they’re doing provide real support—decision tools, cost calculators, and licensed benefits counselors who actually walk employees through the options. This isn’t dropping a website link and wishing them luck.
This is why we provide so much wrap-around support when we help brokers through ICHRA transitions. Satisfaction is directly tied to employees’ ability to find the coverage they need within their allowance. Our experts partner with them in this search on your behalf, drastically increasing the likelihood of success.
When done right, employers are seeing up to 95% satisfaction after their ICHRA transitions.
This Isn’t 2020 Anymore
When ICHRAs first became available, the infrastructure was rough. Vendors were figuring things out. Employers were pioneers.
Five years later? The market’s matured. You’ve got vendors with sophisticated platforms that integrate with payroll, automate compliance reporting, pay insurers directly, and provide support that rivals traditional group plan experiences.
Large employers aren’t being asked to be guinea pigs. They’re adopting proven solutions with established support systems.
The Bottom Line
ICHRAs aren’t just for small businesses. They’re for any employer ready to think about health benefits differently.
Does that mean they’re right for your client? You’re the expert here. It will depend on their specific workforce, market, and timeline.
But don’t write them off because someone told you they’re “only for small companies.” That ship sailed about 500,000 enrolled lives ago.
Still not sure if ICHRA is the right move for your client? Reach out, and we’ll find the real answer together.
— Andy
