On August 12, 2026, the HRA Council released its 2026 data report, “Growth Trends for ICHRA & QSEHRA, Vol. 5,” offering a comprehensive look at the growth of stand-alone health reimbursement arrangements (HRAs), especially individual coverage HRAs (ICHRAs).
This year’s headline: ICHRA adoption grew 108% among large employers from January 2025 to January 2026 in the aggregate data, including new HRAC members1. Using only data from those who shared last year, applicable large employer (ALE) growth is still up 39%, a larger increase than the 34% reported in 2025.2 This growth was driven by an increasing number of employers seeking flexible, cost-controlled alternatives to traditional group health plans. This reflects the data we’ve seen first-hand at Remodel Health, with ALE customers up 455% between 2024 and 2026.
Notably, ICHRA is up 99% in total aggregated growth among the data-reporting HRA Council members, of which Remodel Health is a member. The report also shared a more conservative 49-54% pro forma growth rate when comparing all figures and data providers. At Remodel Health, we believe the growth rate of the ICHRA market is around 50%.
However, the story isn’t just about growth. The ICHRA market is maturing. Employers are embracing this health benefit, leading to increased adoption and positive impacts on the individual health insurance market.
In this blog post, we’ll examine the HRA Council’s latest findings and provide additional insights based on our customer data featured in our 2026 National ICHRA Report.
In this blog post, you’ll learn:
The latest HRA Council Data Report shows increasing growth in HRA adoption. However, ICHRA is driving more growth than the qualified small employer HRA (QSEHRA), with a pro forma increase of around 50% and an aggregate YoY increase of 99% in the number of employers offering the benefit.
QSEHRA still saw modest growth, with a 10% increase in the number of organizations offering the benefit.
Here’s how this year’s growth data compares to previous reports:
|
Year |
QSEHRA |
ICHRA |
||
|
Growth rate |
Growth in employers |
Growth rate |
Growth in employers |
|
|
2021 to 2022 |
20% |
+909 |
52% |
+788 |
|
2022 to 2023 |
8% |
+447 |
88% |
+2,016 |
|
2023 to 2024 |
-2.5% |
-145 |
23% |
+1,002 |
|
2024 to 2025 |
18% |
+998 |
21% |
+1,127 |
|
2025 to 2026 |
10% |
+638 |
99%* |
+6,382 |
*Aggregated growth, including data from new data providers who haven’t previously contributed. The HRA Council estimates a 49-54% growth rate when accounting for this.
The HRA Council report has confirmed that at least 261,000 employees participated in an ICHRA as of January 2026, with a total of 402,000 covered lives (including dependents and employees). Last year, the Council reported a confirmed total of at least 250,000 covered lives, reflecting substantial growth in ICHRA.
The Council considers the data in the report a floor for ICHRA, as these numbers come from confirmed enrollment data from data-reporting members. With most ICHRA vendors not providing data, the report estimates at least 500,000 covered lives in January 2026, with HRAC data covering an estimated 75-80% of the market.
However, others, such as HealthSherpa, estimate that there are between 500,000 and 800,000 enrolled ICHRA members3, with one million or more expected by January 2027.
“As a Board Member of the HRA Council, I see this market from two angles: helping shape the broader ICHRA ecosystem, and seeing firsthand how employers and employees experience this shift,” Johnna Barnard, Chief Customer Officer at Remodel Health, said. “This year's data confirms what we're seeing every day — ICHRA is becoming an essential part of the future of employer-sponsored health benefits.”
Both types of HRAs let employers offer tax-free money, called a contribution or allowance, to employees for qualified individual health insurance. This gives employers a way to control their benefits budget with more predictable costs. Employees can then choose the individual plans that best fit their needs instead of being forced into a one-size-fits-all group plan.
Unlike QSEHRA, which is only for small businesses with fewer than 50 full-time equivalent employees (FTEs), ICHRA is available to employers of all sizes, including large and enterprise groups. The QSEHRA also has a maximum annual allowance cap. In contrast, employers can offer as much as they’d like with an ICHRA. The ICHRA also offers additional customization features, such as employee classes. This flexibility makes an ICHRA more attractive for growing organizations and those large enterprise groups looking to rein in healthcare costs.
Additionally, many HRA vendors only offer ICHRA administration. Of the data reporting HRA Council member organizations that contributed to this report that are also vendors, only a quarter also offer QSEHRA administration. Our PeopleKeep QSEHRA product alone accounts for nearly 40% of the 2026 QSEHRA data in the HRA Council report.
Most employers offering a QSEHRA or ICHRA are non-ALEs. According to the HRA Council, 80% of employers offering an HRA were non-ALEs with fewer than 50 full-time equivalent employees (FTEs). This is consistent with the QSEHRA’s limitation to non-ALEs and the ICHRA’s appeal for non-ALEs.
An HRA, such as QSEHRA and ICHRA, is a gateway for small businesses that previously were unable to provide health insurance. This contributes to a decline in the number of uninsured individuals. An HRA can also give small organizations a competitive advantage by helping them attract and retain skilled employees.
But the adoption of these benefits isn’t confined to small businesses. Once again, ALEs, those with 50 or more FTEs, are the fastest-growing cohort of employers offering an ICHRA, with a 108% aggregate growth trend from 2025 to 2026. Using the more conservative number from only those who provided data in 2025, ALE growth is up 39%, compared to the 34% increase reported from 2024 to 2025.
More large and enterprise groups are finding that the ICHRA can help them control costs and promote employee choice. According to PwC, group healthcare costs are expected to increase by an average of 9% in 2027.4 That’s the highest growth rate in 17 years. With high increases in group health insurance rates and rising healthcare costs, ICHRA reduces risk by moving employees to community-rated individual plans.
Here’s the breakdown of growth in HRA adoption by employer size:
| Employer size | Growth rate 2024 to 2025 | Aggregate growth rate 2025 to 2026 |
|---|---|---|
| 1 – 5 employees | 19% | 73% |
| 6 – 20 employees | 10% | 128% |
| 21 – 49 employees | 29% | 128% |
| 50 – 99 employees | 44% | 111% |
| 100 – 199 employees | 49% | 101% |
| 200+ employees | 31% (reported as 200+ employees) | 128% |
| 500-999 employees | 105% | |
| 1,000+ employees | 178% |
Analyzing the data from the report, we’ve found that the share of employers offering an ICHRA that are ALEs is 25%, up from 23% last year. This increase industry-wide is more modest than what we’ve seen at Remodel Health. According to our 2026 National ICHRA Report, the share of ALEs on the Remodel Health ICHRA product increased from 28% in 2025 to 41% in February 2026.
These numbers show that ICHRA isn’t just a small business solution. Offering an ICHRA can have a strategic advantage across the board. As larger employers continue to seek ways to control benefit costs, ICHRA adoption among this cohort is likely to continue growing.
The HRA Council also compiled data on the individual health insurance metal levels that employees chose. This information can help employers better understand the types of plans their employees are most likely to choose, which could affect the allowance the employer wants to provide.
Here’s the breakdown of plans reported among HRA Council member customers from 2023 through 2025:
Gold plans are the most popular option, with Silver plans right behind. Combined, Platinum, Gold, and Silver plans account for 68% of plan selections. This suggests employees are choosing plans that meet their healthcare needs, not just their wallets.
The report further validates this trend by examining how employer contributions compare with the chosen plans. The data reveals 81% of employees chose to flex up and purchase a more expensive plan with better coverage, while 19% chose a plan fully covered by their ICHRA contribution. Employers make a robust ICHRA contribution on average, with a $459 median allowance compared to a $567 median premium. Contributions cover 80-85% of employees’ Silver, Gold, and expanded Bronze premiums on average.
Lately, many experts and benefits consultants have raised concerns about the stability of the ACA individual market. With the expiration of the enhanced premium tax credits on January 1, 2026, premium increases were much higher than average. This led to a decline in the number of individuals enrolled in the individual market.
KFF’s analysis of enrollment data estimates that effectuated ACA Marketplace enrollment fell from 22.3 million enrolled in 2025 to 17.5 million in 2026.5 With another year of higher-than-normal rate increases expected for 2027, many wonder if this trend will continue.
The reality is that ICHRA is helping to stabilize the individual market. As ICHRA grows, the market also grows healthier. As more healthy individuals join the individual market, the risk pools improve. This stabilizes premium rates.
The HRA Council report found that 56% of Marketplace enrollments through ICHRA are by primary subscribers younger than 45. The largest share of employees was in the 26-34 age bracket, accounting for 26% of total QSEHRA and ICHRA primary subscribers.
Average age of primary subscribers via an HRA
Additionally, 64% of Remodel Health ICHRA members are age 45 or younger.
Rapid employer adoption of ICHRA is only half the story. As large and enterprise organizations switch to ICHRA from traditional group health insurance, the benefit itself becomes more challenging to administer. Managing ICHRA for a 25-employee small business is different from the operational complexity of a 1,000-life group with multiple classes and employees spread across multiple locations.
With the share of ALEs offering ICHRA growing faster, this shift is already happening. Our data reflects the same trend: ALE customers grew 455% between 2024 and 2026, now making up more than 40% of our Remodel Health platform.
"ICHRA isn't simply growing — it's maturing,” Barnard said. “The conversation has shifted from whether employers will embrace this benefit to how we build the infrastructure, carrier relationships, and service experience necessary to scale it responsibly."
These employers need more than a basic administration platform. Those moving to ICHRA today are buying into an ecosystem that has to scale alongside them. ICHRA requires the right team, structure, and expertise to ensure nothing falls through the cracks in the moments that matter most.
At Remodel Health, this is exactly why we’ve invested in both our technology and the people behind it. We believe technology should scale empathy, not replace it. Our licensed team guides organizations and their employees through the benefits cycle. We're an active partner at every stage, from advising employees through the plan selection process to proactively surfacing compliance obligations.
The 2026 HRA Council Data Report provides a clear picture of where ICHRA is headed. With continued adoption growth, high employer retention, and generous contribution trends, ICHRA is becoming an essential part of the health benefits landscape.
But with data from only 17 member organizations, including Remodel Health, the overall ICHRA market is likely much larger, with more than 60 ICHRA platforms administering the benefit.
For employers and brokers, this data confirms that ICHRAs are delivering meaningful results by lowering costs, expanding access to care, and empowering employees to make their own coverage choices.
At Remodel Health, we’re proud to be a contributing member of the HRA Council. As the leading ICHRA administrator, we help organizations of all sizes transition from traditional group plans to a more flexible, cost-effective benefits model.
Want to see more data? Get the HRA Council’s full report.
This blog post was originally published on June 17, 2025. It was last updated on August 20, 2026, with the latest HRA Council data.