ICHRAs are reshaping the health insurance benefits landscape by solving some of the most persistent challenges with employer-sponsored health insurance: high cost, limited choice, and complex administration.
Traditionally, employers have had little control over their health insurance budget, employees have been pigeonholed into selecting from 1-3 policies, and additional layers of complexity, like participation requirements, have created even more headaches.
ICHRAs relieve these headaches and provide the following 6 reasons for employers, brokers, and distribution partners to appreciate all they have to offer.
1. ICHRAs enable employers to control their healthcare costs.
According to a recent report from AON, companies can expect the average cost of their employer-sponsored health plans to increase by nearly 10% in 2025 if they don’t find ways to control costs. These large increases, which put the average cost per employee at more than $16,000, are becoming unsustainable for many companies.
These price increases are creating new challenges for employer-sponsored health insurance. ICHRAs are a cost control mechanism to combat these rate increases, enabling employers to continue offering high-quality health insurance benefits. With an ICHRA, employers set their maximum contribution amount — free of minimums and maximums — and provide pre-tax money that employees can use to purchase an individual policy of their choosing.
Show your clients how ICHRAs can help control costs.
2. ICHRAs offer flexibility in how employers can define contribution allowances.
Employers can offer different contribution allowances to up to 11 employee classes. Using the following classes, employers can both define 1) who is eligible and 2) how much contribution each class can receive:
- Full-time employees
- Part-time employees
- Seasonal employees
- Salaried employees
- Non-salaried employees (such as hourly)
- Employees covered by a particular collective bargaining arrangement (different bargaining units can be separate classes)
- Employees who have not satisfied a waiting period
- Temporary employees of staffing firms
- Non-resident aliens with no US-based income
- Employees working in the same insurance rating area (geographic location, state, or region)
- Any combination of two or more of the above
One of the biggest advantages of an ICHRA is that it allows companies to give their part-time and seasonal employees access to employer-provided benefits, which can significantly impact their ability to attract and retain talent. Plus, since employees are buying individual policies, they can keep their coverage even when their seasonal work ends.
In some cases, it might even make sense to keep certain employees on a group plan and offer other classes of employees (e.g., seasonal workers) an ICHRA plan. Fortunately, ICHRAs don’t have to be all or nothing.
3. ICHRAs provide freedom of choice for employees.
Employees value having choices in their health insurance benefits. In fact, according to the 2024 Global Benefits Attitude Survey from WTW, of the employees with the most choice in benefits, 76% report that their benefits meet their needs, and 78% would recommend their employer as a good place to work.
ICHRAs overcome this challenge of employer-sponsored health insurance by allowing employees to choose the individual policy that suits their needs best. At the same time, employees continue to get their employer’s support in paying for coverage.
And choice is what they’ll find in individual marketplaces. According to data from KFF, an average of over 9 insurers are participating in the individual health insurance marketplaces in 2025. The result is significantly more choice when compared to a traditional group plan that offers 1-3 policy options from a single insurer.
4. ICHRA plans do not have participation requirements.
One reason employers offer so little breadth and depth in their traditional group health plan benefits is that they often have to meet strict participation requirements. This employer-sponsored health insurance challenge is not a factor with ICHRAs, which remove these participation requirements entirely.
Interestingly, when a Nexben client, a national freight train transportation company, began offering employees an ICHRA plan, the employer saved 20% (nearly $90,000) and saw an 11% increase in participation. Lack of participation requirements doesn’t necessarily mean fewer employees will participate. Instead, it means that when unburdened by these requirements, employers have more flexibility to offer more choice to their employees.
5. ICHRAs are an additional way for brokers to earn and retain business.
High group plan rate increases are forcing many companies to rethink how — and if — they can continue to provide health insurance benefits. Savvy brokers know that if they don’t present ICHRAs as an option to their clients for controlling costs, someone else will.
ICHRAs can be an additional source of business for brokers and distribution partners. When working with an ICHRA technology provider like Nexben, brokers can retain their status as the agent of record to earn commissions on purchased ICHRA plans. Alternatively, brokers can send their clients to one of Nexben’s enrollment partners, and those partners will compensate the brokers based on their referral fee structure.
Either way, ICHRA plans are a solid way for brokers to build or maintain their books of business— and the ones who aren’t scared off by ICHRAs will benefit.
6. ICHRA administration is simple with the right technology partner.
ICHRA plans have a reputation for being complex to manage. However, technology advancements, like Nexben, have nearly eliminated the administrative burden of ICHRAs for employers. Here are some examples of how Nexben is making ICHRA administration simple:
- Onboarding is as simple as the employer uploading a spreadsheet with employee data.
- Employees can access their employer’s contribution via a unique bank account, ensuring a secure and compliant payment transfer.
- Nexben’s payment technology distributes all defined contributions across all employee benefit plans, regardless of how many different insurance carriers employees choose from. All the employer has to do is click one button to pay a monthly invoice.
- Nexben provides reports to support payroll deductions and ACA reporting requirements.
ICHRA payment and administration really can be simple. See for yourself.
As the ICHRA market grows, more employers are beginning to appreciate all that ICHRAs offer them and their employees: a way to control healthcare costs and meet employee expectations for greater choice and flexibility. By partnering with a technology provider like Nexben, brokers and distribution partners can strengthen their client relationships and grow their businesses by offering clients a compelling new option with minimal administrative burden.
About Nexben
Nexben is a financial technology company that helps employers, brokers, and distribution partners reap all ICHRA benefits. Get in touch if you’d like to learn more about how offering Nexben can help you deliver the best options to your employer clients and their employees.