Employers considering an ICHRA often want to know whether it genuinely works for both sides of the table, or whether it solves one group’s problem by creating a new one for the other. Take Command’s 2026 State of Employee Health Benefits Survey gives a clear answer.
Among the 1,000 employees surveyed, those with individual insurance paid a median of $751 out of pocket in 2025, compared to $1,200 for employees on a group plan. That same shift toward individual coverage is also giving employers something group plans rarely deliver: a budget they can actually predict.
This is blog five of six in our series. Read the first four installments here:
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New data shows employees are at their health insurance breaking point
- The tables have turned: HRAs are replacing group plans as a lead health insurance option
What is an ICHRA?
An Individual Coverage Health Reimbursement Arrangement, or ICHRA, is a type of HRA that lets employers of any size reimburse employees tax-free for individual health insurance premiums and other qualifying medical expenses.
Instead of enrolling everyone in one group plan, the employer sets a monthly allowance, and each employee shops the individual market for the plan that fits their own doctors, prescriptions, and budget.
Employers can also divide their workforce into classes, such as full-time, part-time, salaried, or hourly, and set a different allowance for each. That makes ICHRA a strong fit for mixed workforces spread across multiple states or work arrangements, since coverage travels with the employee no matter where or how they work.
Health insurance options that lower costs for employees and stabilize budgets for employers
For employees, the cost picture is straightforward.
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The median out-of-pocket cost for individual insurance was $751 in 2025, compared to $1,200 for group plans.
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Heading into 2026, group premiums increased for 76% of employees, while the increase rate for individual insurance was lower at 67.6%.
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Individual-market employees were also more likely to see no change in cost at all, at 30% compared to 23% on group plans.
Skilled trades show the pattern most clearly. Over half (54.5%) of skilled trade employees with individual insurance saw no cost increase heading into 2026, while seven out of 10 of their group plan colleagues did, despite working in the same industry with a similar risk profile.
For employers, the win isn’t a lower number so much as a predictable one. With a group plan, one high-cost claim in the pool can reshape the entire company’s premium at renewal, regardless of how well the business managed its budget the rest of the year.
With an ICHRA, the employer sets a defined contribution amount and decides if and when it changes. That decision sits with the business, not the insurer, which turns an annual guessing game into a number leadership can plan around before the year even starts.
Satisfaction rises for employees, and that shows up in retention for employers
Employees with individual insurance are more likely to say their plan delivers quality care. Overall, 34.5% reported being very satisfied, compared to 32% of employees on group plans. The edge holds industry by industry:
Five very different workforces land on the same result. Satisfaction with a benefit is tied to whether employees feel supported enough to actually use their insurance instead of avoiding care, and a plan built around one person’s needs tends to earn that trust.
For employers, that satisfaction is directly tied to the numbers that matter most in recruitment and retention. Across our survey, 94% of employees said health benefits were somewhat or extremely important when deciding whether to stay at a job, and more than half said they would not take a new opportunity with a poor benefits package.
Health insurance flexibility keeps employees with their providers and simplifies life for employers
Losing access to a trusted doctor after a group carrier switch was one of the biggest fears employees raised in Take Command’s survey, and individual insurance moves that fear in the opposite direction.
Among the roughly 9% of respondents who currently have an HRA, all but one said their plan lets them see the providers who matter to them, and more than half said their employer covers their full premium.
Hospitality and tourism shows this clearly. In an industry where 45% of employees already buy on the individual market, well above the 22.4% average across all industries, 86.7% said their plan lets them see the providers they need. For a workforce often excluded from group plans due to part-time schedules, individual coverage is frequently the only path to consistent access at all.
Employers benefit from this same portability. Because the employee owns their individual plan, coverage and provider relationships travel with them when they change jobs, without triggering the administrative work of COBRA on the employer’s end. That’s one less process for HR to manage every time someone leaves.
Employers are adopting this health insurance alternative at scale
Employee results only tell half the story. Employers are moving toward this model in real numbers. According to the HRA Council’s 2025 data report,¹
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Large employer ICHRA adoption climbed 34% year over year,
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83% of small businesses turned to an HRA to offer health benefits for the very first time, and
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Dependent enrollment in HRAs rose 37% year over year.
Those figures describe a shift happening across company sizes and industries at the same time employees are reporting better outcomes. It also means employers adopting an ICHRA today aren’t testing something unproven; they’re joining a model that a growing share of the market has already put through its paces.
Health insurance education makes the difference for both sides
An alternative that works on paper still needs the right support to work in practice. Several survey respondents described real anxiety about picking a plan on their own, finding an in-network provider, or estimating what they would owe.
Take Command, leading ICHRA administrator:
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Pairs every ICHRA with an in-house support team that walks employees through their options,
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Lines up plans against their actual doctors and prescriptions, and
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Handles enrollment, so the process goes smoother for the HR team and employees.
That guidance is a meaningful part of why the satisfaction numbers above look the way they do.
It also matters for employers. A defined contribution only delivers the cost predictability and retention benefits above if employees actually use it well. A confused employee is more likely to pick a plan that doesn’t fit, skip enrollment altogether, or end up back at HR with questions the business isn’t equipped to answer. Take Command’s team absorbs that entire layer, so the employer’s investment in the benefit actually pays off instead of quietly leaking value at the enrollment stage.
The results are consistent across industries
Some employers assume a new benefits model will only work for a specific type of company or workforce, but the data doesn’t support that assumption.
Concern about rising costs into 2027 stays high in every industry surveyed, from 68% in the skilled trades to 90% in education. Interest in an employer-funded, employee-chosen model is just as broad, ranging from 36% in government to 66% in IT. Employees across very different fields are asking for the same thing: better and more stable costs.
The outcome of ICHRA usage are just as consistent. Satisfaction with individual insurance beats group plans in education, healthcare, hospitality, skilled trades, and IT alike, with the gap never reversing in a single industry surveyed. Cost stability follows the same pattern:
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54.5% of skilled trade employees with individual insurance saw no cost increase heading into 2026, compared to seven in 10 of their group plan colleagues
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Provider access tells the same story in hospitality and tourism, where 86.7% of individual-market employees can see the providers they need, in an industry that leans on part-time and seasonal staff more than most.
That consistency is the strongest argument for ICHRA as a health insurance alternative rather than a workaround suited to a handful of use cases. Employees everywhere want coverage that fits their own circumstances, and a model built around individual choice delivers that regardless of industry.
What the data shows
Across cost, satisfaction, and provider access, employees with individual insurance came out ahead of employees on group plans in our survey. Employers saw a matching upside: A contribution they control, less exposure to a single bad claim reshaping the renewal, and a benefit that is more likely to contribute to employee retention.
Ready to see what an HRA could do for your team? Talk to a Take Command expert and we will show you how.
References
- HRA Council, 2025 HRA Council Data Report. https://www.hracouncil.org/report
