ICHRA: An ‘and’ instead of an ‘or’

By Ben Light and Sam McIntyre

For years, individual coverage health reimbursement arrangements were framed as a fallback solution for small employers who couldn’t swing traditional group coverage. But that narrative is quickly becoming outdated.

Today, ICHRAs are emerging as a strategic lever for employers of all sizes. ICHRAs are no longer just an “instead of,” but also a foundational “yes, and.” Advisors on the leading edge are building flexible, cost-conscious, comprehensive benefit strategies with ICHRAs at the core — not because they have to, not because their clients have no other option, but because ICHRAs open the door to better meet the needs of increasingly diverse and distributed workforces.

So what does that mean for benefits advisors? In short: it’s time to stop asking, “Group or ICHRA?” and instead ask, “What else becomes possible when ICHRA is part of the plan?”

Reframing the either/or mindset

It’s easy to fall into a binary comparison: a rich, fully insured or self-funded plan with every wellness perk versus ICHRA as a stripped-down alternative. But that framing misses the point. When advisors position ICHRA not as a replacement, but as a strategic foundation for a more personalized, flexible benefits experience, it becomes a launchpad to build something better, not a fallback.

That either/or mindset stifles creativity. It assumes there’s one “right” answer for all organizations and all employees, regardless of workforce makeup, location, life stage or budget.

In reality, we operate in a modern benefits landscape shaped by complexity: distributed workforces, shifting expectations, financial pressure. That’s exactly where ICHRA shines: as a tool that helps employers respond with nuance.

ICHRA: A strategic lever, not a compliance stopgap

Some still see ICHRA as a compliance tool: a way to fulfill the Affordable Care Act requirements with minimal cost or effort. But that’s a short-sighted view.

Advisors who truly understand the “and” potential of ICHRA are using it to rethink the entire benefits package, and we’re seeing this play out across industries and geographies.

One real-world example? Carve-outs. When a fully insured or self-funded group plan underperforms in a specific state or for a particular subset of employees, ICHRA becomes a targeted solution, not a full replacement. Employers can maintain what’s working while customizing around what’s not.

Direct primary care is another. Some organizations are starting with ICHRA as the foundation, then layering in DPC as a front-line investment in accessible, relationship-driven care. It’s not just an add-on; it’s a deliberate shift that prioritizes everyday health needs while still protecting against the big stuff. And it’s driving real savings along the way.

And that strategic flexibility doesn’t stop there. Employers are also reinvesting ICHRA savings into high-impact, high-touch benefits like:

• HSA seeding
• Section 213(d) and qualifying medical expenses reimbursements
• Virtual-first primary and urgent care with guaranteed return on investment based on usage
• Whole-person mental health solutions
• In-house clinics or on-site providers
• Ancillary lines such as disability, life, long-term care or even cyber insurance

Employers and brokers are also rethinking wellness programs — not as a discount tactic, but as a cultural investment. Yes, it’s harder to quantify ROI when you’re not chasing premium reductions or carrier incentives. But brokers are helping clients shift the conversation away from quarter-by-quarter metrics and toward long-term retention, engagement and well-being.

What ICHRA means for advisors

Here’s the real takeaway: ICHRA isn’t a last resort or a niche option anymore. It’s a strategic “yes, and” model that allows employers to design benefits around their people, not force people to fit into their benefits.

Still, ICHRA adoption is in its early innings. Innovators have already made the leap, and early adopters are now testing the waters. But many employers are still waiting for someone else to go first. That’s where advisors come in: not just to explain the mechanics, but to lead with confidence and show what’s possible.

For brokers and consultants, this shift means moving from product seller to strategic architect. It opens the door to deeper trust, smarter design, and more meaningful outcomes as clients and their teams demand more flexible, forward-thinking strategies.

No, ICHRAs won’t solve everything. But ICHRAs create space for something better: more adaptive, inclusive and resilient benefit models. And that’s where the magic starts to happen.

Rethinking the benefits toolkit

ICHRA isn’t about giving up group coverage. It’s about gaining options. The brokers getting it right aren’t choosing sides in the “ICHRA versus group” debate. They’re stacking strategies. They’re customizing. They’re solving problems, whether those problems are unsustainable premium costs, underperforming plans or the need for more inclusive benefits in a tight labor market.

This isn’t an “or moment.” It never was. It’s a “yes, and” movement, and if we embrace it, the future of benefits might finally start to feel like it fits.

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

Sam McIntyre is client executive with M3 Insurance. Contact him at [email protected].

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