ICHRA for Large Employers: A Practical Playbook

For years, Individual Coverage HRAs (ICHRAs) were seen as a niche solution for small businesses. That story is changing fast. Today, large employers are leading the next wave of adoption. Why? In a (few) words, rising group health costs, distributed teams, and the need for compliance-ready flexibility are pushing companies to rethink how they deliver benefits.

Read on for all you need to know about ICHRA for large organizations.

First: What is ICHRA and how does it work?

An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an employer-funded, tax-advantaged insurance benefit that allows companies to set a fixed monthly allowance for employees. Instead of being limited to a few group health plan options, employees use that allowance to choose between dozens of ACA-compliant plans (or more!) that best fit their doctors, prescriptions, and budgets.

The benefits? Employers get predictable, controllable costs. Employees get meaningful choice and portability (their plan goes with them, even if they change jobs). All in all, a win-win for companies and their teams.

Want a deeper dive into the rules, compliance details, and benefits? Check out our full breakdown of what ICHRA is and how it works here.

Why large employers are paying attention to ICHRA

The numbers speak for themselves:

• ICHRA adoption among ALEs grew 34% from 2024 to 2025, with nearly a 50% increase among groups sized 100–199 employees.
• In Zorro’s 2025 Broker Benefits Survey, more than 10% of brokers reported selling ICHRA to clients with 101–500+ employees.
• And once an employer makes the leap, they stick with it—92% of employers who offered ICHRA in 2024 continued in 2025.

This isn’t a temporary cost-cutting trend. It’s a structural shift toward defined contribution benefits, offering predictability for employers and personalized choice for employees.

The practical playbook for enterprise organizations

Making ICHRA work at scale requires more than flipping a switch. Here’s how large employers can build a strategy that lasts:

1. Choose the right ICHRA administration platform.

The difference between a successful rollout and an administrative nightmare comes down to the platform. A purpose-built ICHRA admin partner like Zorro eliminates manual reimbursement tracking, messy spreadsheets, and compliance guesswork. 

Our technology automates class-based allowance setup, affordability testing, and IRS reporting, while giving HR and finance leaders real-time dashboards to manage benefits with clarity. For employees, it means a consumer-grade shopping experience with ongoing support. For HR administrators, it means confidence, compliance, and far less administrative overload.

2. Evaluate organizational and employee needs.

Start by assessing the fundamentals: What are your budgetary constraints? How is your workforce structured (hourly, salaried, seasonal, or a mix)? Where are employees located—consolidated or spread across multiple states? 

These factors shape how you design employee contribution classes, ensure ACA compliance, and communicate changes effectively. A thoughtful upfront evaluation prevents surprises down the line.

3. Set a predictable budget.

Instead of absorbing double-digit renewal hikes, employers define a fixed monthly allowance per employee. That allowance can vary by class, enabling differentiated strategies for salaried staff, hourly workers, or geographically distributed teams.

4. Empower employee choice.

Employees use their allowance to shop the individual market—often 50–100+ ACA-compliant plans. For large employers, this solves multi-state challenges where one carrier network can’t sufficiently cover everyone.

And if the concept of employees choosing their own plans feels overwhelming, ICHRA administration platforms like Zorro can help. With Zorro, employees navigate an intuitive shopping experience, with personalized recommendations based on their unique health profile and preferences and in-platform guidance backed by data and AI. 

The result: roughly 75% of employees select coverage entirely on their own, eliminating administrative overload for HR and benefits teams (though live support is always available if needed).

5. Ensure ACA compliance.

For ALEs, compliance is non-negotiable. The best ICHRA administrative platform bakes it into every step—from allowance modeling and quoting to affordability testing, documentation, and ongoing reporting. Employers stay protected from penalties while employees maintain access to subsidies when applicable.

6. Focus on change management.

Our recent Broker ICHRA Survey Report found the biggest hesitations among brokers and employers weren’t about cost savings—they were about the employee experience (55%) and perceived plan quality (51%). For large-scale rollouts, education and decision support are imperative. Platforms like Zorro simplify this with AI-powered plan recommendations, multilingual support, and compliance automation.

ICHRA in real life: Implementation at scale

Take Rush Memorial Hospital, for example. The rural Indiana facility faced unsustainable group health renewals. Instead of passing costs to employees, leadership partnered with their broker and Zorro to implement an ICHRA.

The shift delivered $2.25 million in annual savings and gave nearly 400 employees access to 60 plans from six carriers. With Zorro’s AI-powered decision support, employees confidently chose coverage on their own while HR avoided the usual administrative overload.

Rush Memorial proves that even large, community-centered employers can modernize benefits without compromising trust or care quality.

In conclusion

For large employers, ICHRA is no longer an experiment; it’s a proven, practical playbook for rethinking health benefits. By starting with workforce needs, setting a predictable budget, and leaning on the right technology partner, ALEs can control costs while giving employees unprecedented choice and flexibility. 

Curious what ICHRA could look like for your organization? Request a demo today for a 1:1 walkthrough.