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HRA Council Report: Growth Trends For ICHRA

The HRA Council recently published its 2023 data report, offering a comprehensive analysis of Health Reimbursement Arrangements (HRAs), including Individual Coverage HRAs (ICHRAs). According to the report, there was a notable increase in the adoption of HRAs among American workers between 2022 and 2023. Specifically, coverage through ICHRAs tripled!

Robin Paoli, Executive Director of the HRA Council, stated that through ICHRAs, employees are afforded the autonomy to choose health insurance plans that align with their individual health requirements. By providing employers with predictable budgets for health benefits, HRAs enable employees to secure insurance through trusted providers, ensuring compliance with the Affordable Care Act (ACA) and safeguarding against discriminatory practices.

The report further elucidates the emerging popularity of HRAs, likening them to 401(k) plans with respect to health coverage. It highlights their efficacy as a practical solution for employee benefits and their indispensable role in the evolution of bipartisan health policies that aim to render the healthcare system more accessible and affordable.

One key revelation of the report is that HRAs act as a gateway for companies that have previously been unable to provide health insurance, thus contributing to a decline in the number of uninsured individuals. Additionally, HRAs offer small and mid-size businesses a competitive edge by aiding in the attraction and retention of skilled employees.

Moreover, the report emphasizes that the utilization of ICHRAs is not confined to small enterprises. Adoption rates among Applicable Large Employers (ALEs) have more than doubled between 2022 and 2023, with a staggering twenty-five-fold growth since 2020.

“ICHRAs are a bipartisan success to advance health equity and connect more American workers with Affordable Care Act plans offering access to mental, behavioral, and physical care.

Robin Paoli, Executive Director, HRA Council

Among other salient findings, the report reveals that HRAs bolster the marketplace by attracting a younger demographic; 61% of those covered under an ICHRA are under 44 years of age. Furthermore, health plans financed through ICHRAs display a balanced distribution among Gold, Silver, and Bronze tiers, indicating a discerning approach by employees in selecting the coverage that best serves them and their families. In addition, while ALEs are showing sustained growth in adoption, it is small businesses with fewer than 20 employees that make up 88% of the employers offering HRAs.

Interested in learning more? Read the HRA Council’s full report and more here!