Health reimbursement arrangements aren’t new; they’ve long provided employers and their employees a tax-advantaged way to fund health care expenses. However, a new frontier in health reimbursement launched in January 2020 when a new regulatory rule gave employers the option to fund their employees’ health insurance premiums and qualified medical expenses via individual coverage health reimbursement arrangements (ICHRAs).

Nexben recently commissioned an analysis of the ICHRA market, conducted and published by Ezer21, an innovation consulting and advisory firm. Through in-depth interviews with brokers, technology leaders, and regulatory experts to gather their perceptions of the key advantages and opportunities with ICHRAs, we learned:


While this analysis revealed many anticipated benefits of ICHRAs, there are some unknowns and challenges given how new they are. These include general lack of employer awareness and understanding, as well as uncertainty about how the Biden administration will regulate ICHRAs given they were introduced by the former Trump administration. ICHRA adoption may also face headwinds in rural geographic areas where the individual market is underdeveloped, as well as from employers that currently offer higher-end employee benefit packages. Regulatory changes are also needed to bolster individual markets to provide a more competitive benefit offering.

Looking to the future

Participants in this analysis believe the benefits of ICHRAs outweigh the challenges, indicating they expect significant growth of 19% year-over-year compound annual growth rate over the next five years. Our analysis shows strong support across brokers, technology providers, and regulatory experts based on the opportunities ICHRA provides to employers and their employees alike.

Market growth for ICHRAs will be buoyed by improvements in technology, increasing familiarity and experience brokers have with ICHRAs, and regulatory changes that improve the attractiveness of the individual market. Technology providers like Nexben are investing in platforms that deliver more seamless and convenient solutions for all stakeholders, reducing administrative costs, delivering better and more accurate data, and providing transparency to help employers and employees make the right decisions for their needs.

Read the full white paper for more insights and analysis.