How Insurers Can Engage Brokers To Capture ICHRA Market
Whether you are a true believer or not, there’s no denying that Individual Coverage Health Reimbursement Arrangements (ICHRA) are now ingrained in the healthcare lexicon. As companies grapple with rising healthcare costs, ICHRA has emerged as a compelling alternative to traditional group plans. Its adoption among employers with 50 or more employees spiked by 84% since 2023, and we project that the market could grow at a compound annual rate of 52%, reaching between 2 million and 5 million people.
Carriers with a strong presence in the Affordable Care Act (ACA) Marketplace are bullish on ICHRA’s potential, and investor interest continues to climb. But while the concept is gaining traction, its success hinges on a key stakeholder: brokers. Without their buy-in, widespread adoption faces significant hurdles. This article unpacks the complexities of the broker channel and highlights the challenges carriers need to overcome.
Understanding the Broker Channel in an ICHRA World
Based on our conversations with various stakeholders, the broker community appears divided when it comes to ICHRA. While some are early adopters, actively pitching ICHRA to their employer clients, others remain skeptical, unaware, or undecided. The divide is largely due to the lack of standardization in this still-emerging market. Compensation structures vary widely, and in many cases, commissions are lower than those associated with group coverage. This disincentivizes brokers from embracing ICHRA and actively promoting it.
Additionally, questions persist regarding who serves as the agent of record — the entity responsible for guiding the employee through plan selection. Some benefit technology (bentech) companies require that they be named the agent of record, which can complicate traditional broker-client relationships. Brokers certified to sell group plans but not individual or family plans may be forced to split commissions with bentech firms or other brokers to facilitate transactions. Beyond these structural challenges, the complexity of ICHRA itself — navigating tax regulations, compliance requirements, and plan enrollment mechanics — adds another layer of hesitation. Many brokers simply don’t yet have the knowledge base to confidently guide clients through an ICHRA transition.
Emerging Compensation Models
Despite these obstacles, early adopters — both carriers and bentech players — are actively working to overcome broker hesitancy. New compensation models are emerging that align with the structures used in group business. Some ICHRA vendors incorporate broker fees into their service costs through per employee per month fees, while others have introduced annual consulting arrangements where brokers shift from commission-based earnings to advisory-based compensation. Additionally, ICHRA vendors are exploring shared commission models where a portion of the insurance commission is allocated to brokers. Some brokers also lease technology platforms from ICHRA vendors to independently manage enrollments. These evolving structures indicate a shift toward more sustainable broker involvement, but further alignment is needed to create industry-wide standards.
Strategies for Harnessing the Broker Channel
For carriers looking to accelerate ICHRA adoption, knowing how to engage brokers will be critical. Not all brokers approach innovation in the same way. Carriers should segment brokers into three key groups: progressive brokers who are eager to embrace new solutions, wait-and-see brokers who follow trends but hesitate to adopt until there’s broader market acceptance, and traditionalists who resist change in favor of ease and efficiency - AKA status quo keepers. Identifying progressive brokers who can serve as ICHRA evangelists should be a priority.
To ensure sustained engagement, brokers must see ICHRA as financially viable. Carriers and benefits administrators (BenAdmins) must consider competitive commission structures, broker of record protections, ongoing client business opportunities, bundled product incentives, and trailing commissions to encourage long-term broker investment. Without a compelling financial case, brokers will be reluctant to push clients toward ICHRA solutions.
ICHRA is often marketed as a consumer-driven approach to healthcare. But the reality is too many options can overwhelm employees rather than empower them. Carriers need to articulate ICHRA’s advantages in a way that simplifies decision-making, ensuring employees and employers alike understand the benefits of right-sized coverage, portability, predictable costs, and meaningful decision support. Artificial intelligence can help consumers narrow their selections, but they must be backed by human guidance to truly add value.
ICHRA is no longer a theoretical disruptor — it is a reality shaping the future of employer-sponsored healthcare. Widespread adoption depends on solving key structural challenges, particularly within the broker channel. By aligning compensation models, simplifying enrollment logistics, and clarifying the value proposition, carriers and BenAdmins can pave the way for ICHRA’s continued growth.
Companies that embrace the shift will position themselves at the forefront of a burgeoning market. Those who resist risk being left behind. The time for carriers to engage brokers strategically is now.