In the Technology Adoption Lifecycle, ICHRA is on the bleeding edge between innovators and early adopters. It’s still early innings, with the ICHRA market standing at around half a million employees compared to more than 150 million on traditional group plans. While that may seem like a drop in the ocean, change is underway. 2024 was the year of the Great ICHRA Awakening, and 2025 looks set to take HRA adoption to new heights.
The Technology Adoption Lifecycle
Before looking at what the future holds for HRAs, it’s useful to reflect on recent developments.
In the last few years, we’ve seen a new wave of ICHRA administration solutions — a clear indication that more employers are turning to the defined contribution model.
At Take Command, we welcome the competition — anything that pushes platforms to better serve their clients supports the cause.
In 2024, ICHRA became a key growth engine for some of the biggest players in the individual insurance space. Insurance companies, including Oscar and Ambetter Health, are now talking about ICHRA as part of their long-term growth strategies. And it’s not just individual-heavy insurers that are showing interest. As providers across the country see ICHRA taking root, they’re asking how they can position themselves for success in the new paradigm. Even healthcare exchanges are engaging, with several state-based exchanges seemingly excited about their future role in the ICHRA ecosystem.
In short, there’s been a lot going on. But the big question now is, what’s next for ICHRA? Here are my three predictions for 2025 based on recent developments and current trends.
At Take Command, one of the things we love about ICHRA is that it’s bipartisan. ICHRA became available during the first Trump administration and gained momentum during the Biden presidency. Now, with Republicans holding a majority in both houses of Congress, we’re starting to see policymakers lean in.
Last December, the House Ways and Means Committee requested information on ICHRA and asked experts to respond to policy ideas.
ICHRA is very much on the Congressional agenda.
In response, Take Command submitted an extensive letter laying out ways to improve ICHRA, supported by stories from benefits consultants and HR professionals. We have a lot of ideas, and it’s encouraging to see that policymakers are interested in hearing what we have to say.
Another promising development is Indiana’s new HRA tax credit for small businesses. Under Indiana House Bill 1004, Healthcare Matters, employers with fewer than 50 employees can receive tax credits for adopting a health reimbursement arrangement instead of traditional group insurance.
Indiana’s milestone move may have set a precedent — several states are now discussing similar proposals to encourage businesses to explore and adopt HRA models. We'll certainly be keeping our eyes on Ohio, Texas and Georgia.
For ICHRA, the “chasm” is just on the horizon. This chasm refers to the gap that separates early adopters from the early majority in the Technology Adoption Lifecycle. It’s the point where many innovations struggle to transition from niche enthusiasm to widespread adoption and can often determine long-term success or failure.
In the context of ICHRA, breaching the chasm will largely come down to smoothing out the change management process and improving the employee experience.
That means working together with health insurance providers to resolve issues around billing, enrollment, or employee communications that can all chip away at member-level experiences.
Take Command recently got together with fellow ICHRA administrators zizzl and Remodel Health. We hope the resulting white paper, “The ICHRA Model & Health Plans: Planning for Operations & Member Experience Success,” will start a dialogue around what great policy-level experiences look like for employees. In the coming months, we’ll be inviting other ICHRA platforms to join the conversation. I predict this will be an important piece in delivering the first-class ICHRA experiences that will continue to drive adoption.
Here's a fun preview of what we've been working on with Future of ICHRA!
With its reliance on employees choosing individual insurance policies, its success hinges on partnering with and educating carriers to elevate the user experience and streamline operations. This white paper is intended for health insurance carriers along with industry consultants, policymakers, and tech vendors who are working directly or indirectly with the ICHRA market.
The goal is for this white paper to be a starting point for discussion with internal champions of ICHRA and leadership across carrier brands. It should be used as an educational and directional resource for insurance carriers as they look forward to further capability investments to support their vision for the future.
As we look ahead, growth is set to accelerate, but at what pace? While I cannot offer a solid answer, I think it’s safe to say ICHRA is growing faster than anyone anticipated, with no signs of slowing.
The HRA Council is an excellent source of information for anyone interested in knowing more about the pace of change. Take Command is one of the founders of the council, a nonpartisan advocacy organization focused on education and awareness. HRA Council members include health insurance leaders, brokers, administrators, insurers, support organizations, and employers offering defined contribution health coverage.
Each year, the HRA Council produces a report on ICHRA adoption. ICHRA platforms, including Take Command, submit blinded data, which is then combined to get an overall understanding of adoption rates. In my opinion, it’s the single most valuable insight into market growth. Preparation for the 2025 report is about to get underway, so watch this space.