ICHRA has moved past the exploratory stage. The early adopters have paved the way, technology platforms have matured, and carriers are leaning in with new and innovative offerings.
But as Individual Coverage Health Reimbursement Arrangements (ICHRAs) become more mainstream, it's time for an honest conversation: ICHRA isn't a silver bullet that works for every employer — but for the right organizations, it can be transformative.
That was the key message of a recent webinar hosted by Zorro and Oscar in partnership with Health Rosetta, featuring Dave Chase (CEO & Founder of Health Rosetta), Will Belletto (VP of Employee Benefits at WaFd Insurance Group), Andrew Reeves (General Manager of ICHRA at Oscar Health), and Ben Light (VP of Partnerships at Zorro).
Rather than promoting ICHRA as a universal solution, these industry leaders offered a refreshingly candid look at when it works brilliantly — and when it doesn't.
When should employers walk away from ICHRA?
Ben didn't mince words: "We don't need the wrong groups in ICHRA." It's a bold statement from an executive at an ICHRA provider, but it speaks to a critical truth: forcing ICHRA into the wrong situation damages not only that employer and their employees, but the reputation of ICHRA as a viable strategy for groups where it genuinely fits.
Here are some signs that ICHRA isn’t a good fit:
→ If employees live in single-carrier counties with severely limited networks. While Andrew noted that "95% of individuals have access to at least three carriers within the market that they're in," there are exceptions. In those rare markets with extremely thin provider networks, ICHRA may not offer the choice and access that makes it compelling.
→ When critical providers aren't available. If your employee population relies heavily on specific providers or health systems that aren't well-represented in the individual market, forcing ICHRA could create serious access issues.
→ When you've built something better locally. If you've invested in building highly effective, localized solutions and your employee population is concentrated enough to make that work, you may not need ICHRA.
When does ICHRA work best for employers?
For the right employers, ICHRA doesn't just work — it solves problems that seem insurmountable through traditional benefit strategies.
Will Belletto shared one scenario that perfectly illustrates this: A 44-person nonprofit was facing a catastrophic renewal. As a level-funded group, their claims data showed high-cost drugs and employees with high utilization.
Will shopped everywhere: "every small group level funded, every self-funded, every captive." The result? Carriers declining to quote or requiring them to remove people from the plan.
But ICHRA dropped their costs dramatically lower than their projected increase. They could maintain their commitment to providing coverage to employees. And they could add Direct Primary Care for a total cost less than their current spend.
Based on insights from the panelists and Zorro's experience, ICHRA tends to work exceptionally well for employers with:
- Rapid geographic expansion
- Remote and distributed workforces
- Part-time workforce
- Employees with vastly different healthcare needs
- Small groups facing adverse selection
- Larger groups seeking predictability
ICHRA as an "And," not an "Or": Using carve-outs as a strategic tool
One reason ICHRA works for more employers than you might expect? ICHRA's 11 employee classes — including geographic location, full-time vs. part-time status, and several others — give employers the option to "carve out" specific populations for ICHRA while keeping others on traditional group coverage.
This means you don't have to move your entire workforce to ICHRA; you can strategically apply it only where it makes sense:
→ Hybrid approaches for different populations. Employers can maintain their carefully crafted local plan for concentrated employee populations while using ICHRA for remote workers or employees in states where the employer lacks network depth.
→ Part-time vs. full-time distinctions. Employers can offer competitive benefits to part-time employees through ICHRA (potentially at a lower contribution level) while keeping full-time employees on traditional coverage.
The class structure transforms ICHRA from a solution that might work for some employers into one that could be strategically deployed by many organizations — not necessarily for their entire population, but for specific segments where it solves real problems.
Some employers maximize ICHRA’s effectiveness with strategic add-ons
Employers can make a stronger impact when they supplement ICHRA with strategic add-ons that expand the range of care and services employees receive — often at a lower price tag than traditional group insurance.
The most powerful according to the panel? Direct Primary Care. "In a great primary care setting, 80 to 90% of the issues people enter the healthcare system for can be fully addressed," Dave Chase noted.
When you pair employer-sponsored DPC with ICHRA, employees get unlimited access to primary care for most of their needs, and "they're using their individual plan more like individual stop-loss," according to Ben.
Other strategic add-ons mentioned by panelists include:
- On-site clinics for larger populations
- Point solutions for specific chronic conditions
- Financial wellness tools to help employees budget for healthcare
Off-exchange innovation is expanding ICHRA’s value
With carriers investing significantly in off-exchange plan innovation, ICHRA is becoming a viable solution for a broader range of employers.
Why do off-exchange health plans matter? Three key reasons: employees can take their portion of the premium as tax-deductible (impossible with on-exchange plans), plans can mirror familiar group coverage designs to ease the transition, and carriers are building dedicated ICHRA service teams for off-exchange plans.
Andrew detailed how Oscar is moving beyond simple ACA metal-tier plans with disease-specific plans tailored to conditions like cardiac disease, diabetes, and menopause, as well as partnership-driven innovation like their Hy-Vee collaboration in Iowa combining consumer clinics with insurance.
The trajectory is clear: as carriers invest in ICHRA-specific innovation, the solution becomes appealing for more employers and employee populations.
Broker expertise often determines ICHRA success or failure
Here's an uncomfortable truth: ICHRA can be the perfect solution for an employer and still fail if the advisor doesn't know how to assess fit, manage change, and provide ongoing strategic guidance.
Will shared these tips on how brokers should support ICHRA adoption:
→ Being willing to say when ICHRA isn't right. Advisors who push ICHRA into every situation because they've learned how to sell it — not because it serves the client — are doing long-term damage.
→ Change management support. ICHRA represents a fundamental shift from employees as passive recipients to active healthcare consumers. Advisors must help employers frame the change as empowerment while providing robust enrollment support.
→ Hands-on support where it matters. Will's office "pushes for people to do one-on-one interviews and get with an enrollment counselor," recognizing that "there's always one healthcare decision-maker in a family."
→ Strategic edge case handling. ICHRA administrators can handle 95% of straightforward cases, freeing advisors to focus on complex situations requiring deep local market knowledge.
Andrew reinforced the advisor's irreplaceable value: "The advisory service that a consultant or a broker gives to their client is critically important... That's going to be an ongoing discussion. It's not a one and done thing."
And Ben delivered the wake-up call many advisors need: "If you're not talking to your clients about ICHRA, somebody else probably is."
ICHRA only works for employers when it also works for employees
Employee experience hinges on proper support. The good news: technology is improving ICHRA navigation rapidly. Using Zorro’s AI-powered decision support, 84% of employees enrolled for 2026 without accessing live assistance during open enrollment, up from 75% in 2025.
But success still requires preparation. Ben advises employees to come prepared with drug lists, doctors, and facility preferences ("It's no different than filing your taxes").
ICHRA clicks when employees realize they're regaining control they lost in previous group plan offerings. As Andrew put it, "It is super, super interesting to see individual behaviors when they're given the dollars and they're buying plans that relate to them as individuals." ICHRA creates actual consumer choice — and people behave differently when it's truly their decision.
ICHRA is not a silver bullet — but it is a tool in a modern benefits toolkit
Andrew offered perhaps the most pragmatic summary: "ICHRA to me is one of the tools in the toolbox, and that tool isn't always gonna work. A Phillips head screwdriver doesn't work with a regular headed screw, and vice versa."
When ICHRA is the right tool for the right employer with the right support, it doesn't just work — it transforms how organizations and employees think about healthcare benefits. But that transformation starts with honest assessment and strategic implementation, not universal application.
Missed the webinar? Watch the full replay on demand here.
