4 tough questions as renewal season approaches

As the latest renewal season approaches, brokers and employers are asking sharper, more urgent questions than ever. The individual market — once a stable alternative to volatile group renewals — is showing signs of pressure. Carriers are reexamining projections. And sweeping legislation is adding new variables to an already complex equation.

We’re hearing a few key themes repeatedly as we continue to have conversations about benefits in the face of new legislation, individual coverage health reimbursement arrangements and their future in the marketplace. Here's what we know and what we're watching.

1. Renewals are spiking — what now?

Group rates are going up - way up. We’re seeing 30% to 60% increases across the board, along with a surge in “decline to quote” responses. The volatility is creating real anxiety for employers and advisors alike.

The individual market isn’t immune to pressure, but it’s still consistently outperforming group on affordability. And it continues to offer one critical structural advantage: community rating.

Unlike experience-rated group plans, individual premiums don’t fluctuate based on company claims history. That makes it more predictable and financially accessible for groups who are providing health benefits to their employees through ICHRAs. It also shifts the risk from the employer to the broader market, reducing long-term exposure.

To be clear: these are challenging times for carriers. Capacity and margin constraints are real. But as long as community rating holds and plan diversity remains strong, the individual market will outperform. As a result, ICHRAs will continue to be a powerful way to de-risk benefits while giving employers and employees more choice.

2. What happens if expanded tax credits aren’t continued?

If Congress allows the expanded Affordable Care Act premium tax credits to expire at the end of 2025, individual premiums are likely to rise. Carriers are currently increasing rates by 4% in anticipation of the expanded tax credits expiring.

As coverage becomes less affordable, more individuals may turn to their employers for help, creating new expectations around health benefits and putting added pressure on companies to respond. This dynamic only reinforces the need for flexible, scalable benefit models, particularly in the face of potential churn as workers without access to affordable coverage seek alternatives. ICHRAs remain a critical option in that equation.

But affordability isn’t only about out-of-pocket costs for employees. It’s also a compliance issue for employers offering ICHRAs. Monthly contributions must meet the IRS’s affordability threshold to avoid penalties, and the threshold is based on the lowest cost on exchange silver plan. Yet in many states, silver plans are more expensive than some gold plans, which may force employers to contribute more than expected to remain compliant. If silver premiums rise faster than other metal tiers, it may create new complexity for brokers helping clients design plans and underscore the importance of strategically reevaluating contributions.

Although the future of premium tax credits is uncertain, there’s cautious optimism that a secondary legislative vehicle may extend or preserve them. In the meantime, brokers and employers should be ready to model different cost scenarios and communicate clearly with their teams.

3. How will the non-codification of ICHRAs into law impact their growth?

The One Big Beautiful Bill Act didn’t codify ICHRAs into law — and yes, that’s raised questions about their long-term viability. But the facts on the ground tell a very different story:

• Carriers continue to invest in ICHRA-specific, off-exchange plans.
• 90%+ of employers offering ICHRAs in 2024 renewed in 2025.
• Applicable large employer adoption grew 34% year-over-year.
• Mid-sized employer adoption jumped 49%.

The regulatory framework remains intact, and momentum continues to build, regardless of formal codification. Brokers are leaning in. Employers are responding. And the market is evolving to support long-term adoption.

Codification may still happen. But even without it, ICHRAs are not just surviving. They are scaling.

4. How will the OBBBA changes (enrollment timelines, qualification, health savings account eligibility additions) impact ICHRAs?

OBBBA didn’t include ICHRA-specific provisions, but it did introduce several reforms that will directly influence how ICHRAs are implemented. Some add friction. Others open the door to new flexibility.

• Expanded HSA eligibility = more strategic plan design options. Bronze and catastrophic plans are now HSA-eligible, expanding access to tax-advantaged savings. Telehealth and direct primary care also now qualify as eligible expenses, giving benefits advisors and employers new tools to build modern, flexible plan designs under ICHRA.
• More ACA friction = greater employer demand. New verification rules, engagement requirements and the loss of auto-renewals may make the ACA harder to navigate. If individual coverage becomes more cumbersome, employers become the default safety net and ICHRAs become the bridge that makes it possible.
• Shortened enrollment windows = less room for error or uncertainty. The bill will shrink open enrollment to six weeks (Nov. 1–Dec. 15) starting late 2026. States can set their own windows but are capped at nine weeks and auto-renewals are going away. That means employees must shop and enroll faster, and brokers must prepare earlier to help clients stay ahead of the curve.

What’s next for brokers and their clients?

These aren’t easy questions. But with the right strategy, brokers and employers can address uncertainty head on.

If there’s one takeaway from this year’s renewal landscape, it’s this: flexibility wins, and ICHRAs give employers and their teams the ability to adapt as the market evolves.

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Ben Light is vice president of partnerships at Zorro. Contact him at [email protected].