Individual Coverage Health Reimbursement Arrangements (ICHRAs) are growing, though at a relatively slow pace. They allow employers to provide their employees with tax-free money so they can purchase their own individual health insurance plans.
During a Monday session at the HLTH Conference in Las Vegas, Centene CEO Sarah London shared her thoughts on ICHRA, calling it the “future of individual health insurance.”
“For me, the underlying thesis [of ICHRA] was driven by a belief, whether you’re talking about health insurance or health care consumption broadly, that individuals are going to demand an increasing amount of agency in their health care journey,” she said. “They are going to want access quickly, conveniently.”
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She added that ICHRA allows employees to pick the plan that actually works best for them. This compares to traditional group insurance, where a company with thousands of employees may only have a few options for health insurance.
In 2026, Centene is actually planning to offer ICHRA to all its employees in Indiana, and London will join the individual marketplace herself to test this option, she noted.
“Just think about me. I’m a 45-year-old woman, relatively healthy. Until Saturday, I hadn’t gone to the doctor this year, and so I can tell you the amount I’m paying for health insurance is way overpaying for the actual cost of the care that I need,” she said, noting that with ICHRA, she could instead purchase an insurance product on the individual exchange that would be more customized and more affordable.
The session’s moderator — Christina Farr, managing director at consulting firm Manatt Health — noted that there hasn’t been much data out there that shows how many people are actually enrolled in ICHRAs at the moment, but London said it’s likely in the hundreds of thousands.
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ICHRAs are based on legislation that was introduced during President Donald Trump’s first term, and momentum was likely “stymied” during Covid, she said. That said, ICHRAs are growing, mainly among smaller companies that haven’t been able to offer health benefits before, while larger employers have been more skeptical.
“I think you can safely say it’s going to be a drip, drip, flood. And the real question is, when and what drives the inflection? … I do think it’s going to take some bigger name companies to step into it,” London said. “And we certainly need the infrastructure. We need the startup companies that are in this space to really step in and make sure that the navigation experience, the purchasing experience, and just the lived experience with the ICHRA administration is as seamless as possible and that will help drive momentum.”
It’s worth noting, however, that not everyone is so bullish on ICHRA.
“I really wonder if any of these ICHRA evangelists have ever bought an individual health plan?” said Ari Gottlieb, principal of consulting group A2 Strategy Corp, in a LinkedIn post. “What they would find, generally, are plans that have Medicaid-based, limited provider networks, with most lacking out-of-state coverage and excluding leading health systems.”
Photo: HLTH Inc.