Americans continue to feel the strain of rising healthcare costs. According to KFF1, nearly two-thirds of adults are worried about affordable healthcare. At the same time, total U.S. healthcare spending has climbed to $5.3 trillion2, averaging $15,474 per person.
As the Chief Revenue Officer at Remodel Health, I work with brokers, carriers, and employers across the country every day. The individual coverage health reimbursement arrangement (ICHRA) isn't growing in popularity because it's the latest fad. It's growing because the market conditions are aligning to make individualized health benefits a practical, long-term strategy.
I see a market that's evolving. It’s becoming stronger, more sophisticated, and better equipped to support employers looking for a sustainable alternative to traditional group health insurance.
Here are five trends that are fueling the next wave of ICHRA expansion.
Rising healthcare costs are forcing employers to rethink their benefits strategy. According to PwC, commercial healthcare costs (group health plans) will increase by an average of 9% in 2027, marking the highest growth in medical costs in 17 years3.
When employers are facing another year of high renewal rates, they're no longer asking whether they should evaluate alternatives. Instead, they're asking what those alternatives look like.
That's exactly what we're seeing at Remodel Health. Our customer data, as shown in our 2026 National ICHRA Report, reveals that ICHRA upmarket growth has seen a 455% increase in large employers offering the benefit from 2024 to 2026. We've also experienced 65% year-to-date growth in our financial win pipeline, meaning more employers are finding that comparable individual health plans cost less than their existing group plan.
As group healthcare inflation rates exceed the individual market long-term, experts expect this trend to accelerate. While ICHRA adoption is still in its early stages, it’s estimated that employers will have more than one million employees on this solution by 1/1/27.
A major misconception currently exists about carrier investments in the individual market. While it’s true that in select markets eight carriers are exiting4 at the end of 2026, these carriers represent only 3.7% of the overall individual market. That’s roughly 694,000 members out of the 18.9 million ACA enrollees in 2026 (post-enhanced subsidy expiration).
|
Carrier |
States exited for 2027 |
2026 membership |
|
Cigna |
AZ, CO, FL, GA, IL, IN, MS, NC, TN, TX, VA |
~369,000 |
|
ConnectiCare |
CT |
3,719 |
|
Medica |
IA, KS, OK |
~13,000 |
|
PacificSource |
ID, MT, OR |
~60,000 |
|
CareSource |
IN, OH, WV |
~104,000 |
|
Mending (Taro Health) |
ME, OK |
~8,100 |
|
Providence |
OR, WA |
~36,000 |
|
Baylor Scott & White |
TX |
~100,000 |
I personally meet with carriers every month, and their investment in ICHRA is clearly growing. Several major insurers reported strong first-quarter earnings results. Claims Benefit Ratios are beginning to stabilize on the 2026 earnings calls, and this is reinforcing their ability and willingness to continue investing in new products, technology, and consumer experiences.
The growing ICHRA investment is most apparent in the number of offerings in the off-exchange market. In 2026, the number of offerings grew by 36% to more than 9,000 plans. The industry will soon hear 2027 news from UHC, Elevance, Ambetter, and Oscar on their latest off-exchange designs, and state and county expansion. These carriers represent nearly 58% of the overall ACA market and continue to develop new innovative options for consumers and employers utilizing ICHRA.
These investments send a clear message: carriers see employer-sponsored individual coverage as a growing segment of the healthcare market. As competition in the off-exchange market increases, employers and employees benefit from more plan choices, better consumer experiences, and a stronger individual market.
To assess the overall health of the individual market, it's important to track year-over-year trends in ACA risk scores. These trends provide insight into the health of ACA risk pools and help indicate where higher claims could lead to future premium increases.
Since ICHRA offers unique tax advantages when employees enroll in off-exchange ACA plans, it's noteworthy that the off-exchange market is getting healthier as ICHRA adoption continues to grow. As more employers adopt ICHRA, they introduce younger, healthier working populations into the individual market, strengthening the overall risk pool.
Today, 64% of Remodel Health ICHRA members are age 45 or younger, compared with 58% of the broader ACA individual market. That's important because balanced risk pools create healthier insurance markets over time.
CMS's 2025 Risk Adjustment Summary Report6 also supports this trend. CMS found that on-exchange risk scores increased more than off-exchange risk scores. Off-exchange risk scores decreased across nearly every metal tier. At Remodel Health, we've embraced that shift by giving employees the ability to shop for off-exchange health plans directly through our platform, making it easier to compare options and enroll with confidence.
While risk adjustment is complex, the broader takeaway is simple: the individual market continues to evolve, and employer-sponsored individual coverage is becoming an increasingly important part of its long-term stability.
As small group health insurance rates have increased, fully insured small group enrollment declined by 2.5 million, from 11.5 million in 2020 to 9 million in 20247. KFF’s 2025 Employer Health Benefits Survey8 found that just over half of small employers with two to 49 employees offer health insurance benefits
Approximately 10 to 15 million employees work for businesses that still don't offer health insurance. As traditional group premiums continue to rise, ICHRA provides these employers with a practical, budgetable way to offer health benefits for the first time, making the new-to-benefits market one of the largest untapped growth opportunities in employer-sponsored healthcare. Instead of leaving employees to cover those higher costs on their own, many are adopting ICHRA to provide tax-free contributions toward individual health insurance.
For many small employers, ICHRA is no longer an emerging option. It's becoming the obvious choice. At Remodel Health, we currently serve more than 5,000 employer groups. The small group, new-to-benefits segment has become one of our fastest-growing markets, with 83% year-to-date revenue growth on our PeopleKeep product in 2026.
A few years ago, employers and brokers wondered whether ICHRA could scale. Today, technology has made administration easier than ever. At Remodel Health, we've invested heavily in our ICHRA+ administration platform to make implementation feel familiar for employers transitioning from traditional group health insurance.
That includes:
But technology is only part of the equation. Switching from a traditional group health plan to ICHRA is a big change. Employers need help managing the transition, and employees need guidance choosing the right health plan and understanding how their new benefit works.
That's where people make the difference. At Remodel Health, every employer is supported by a dedicated launch coordinator, and employees can work one-on-one with licensed benefits advisors throughout the enrollment process.
Technology has made ICHRA easier to administer, but technology alone isn't enough. At Remodel Health, we use technology to scale empathy, not replace it. Every client receives white-glove support from experienced consultants and licensed benefits advisors who are invested in their success. That combination of innovative technology and personalized guidance has made ICHRA a practical solution for organizations of every size.
Employers are searching for more sustainable ways to offer health benefits. Carriers are expanding their investments. Technology has simplified administration. And as more working Americans enter the individual market through ICHRA, the market itself continues to strengthen.
Will there be challenges ahead? Absolutely. Every evolving market has them. But the momentum is real, and the fundamentals are stronger than ever.
That's why I'm optimistic about where ICHRA is headed. The next wave of growth won't be driven by hype. It will be driven by employers making smart business decisions, carriers continuing to innovate, and a healthier, more stable individual market that works better for everyone.
See the latest ICHRA trends in our 2026 National ICHRA Report.