ICHRA Education Gaps Reveal Growing Demand For High-Touch Administrative Support Models

Group health insurance renewals are surging to 60% or higher in some regions, pushing employers to explore alternatives like ICHRA that promise cost control and structural flexibility. But as adoption accelerates, another challenge is emerging alongside the sticker shock: widespread confusion about how ICHRA actually works. Misunderstandings around coverage quality, employee responsibility, and administrative complexity are shaping employer decisions just as much as pricing, elevating education and hands-on support as critical factors in whether ICHRA succeeds or stalls.

Mike Sigal is an employee benefits and insurance sales executive with over thirty years of experience, and most recently was an ICHRA Sales Manager at Gravie. His perspective is noteworthy because he comes from the traditional group insurance world, having spent over two decades at industry giants like Aetna. His move to an ICHRA-focused role mirrors a transformation happening across the benefits market, offering an insider's view on the shift away from one-size-fits-all group plans.

"ICHRA adoption is growing because it provides employers flexibility amid high group plan renewals and gives employees across locations or classes access to major medical coverage," Sigal says. Like many in the industry, he's experiencing sticker shock at the plan costs hitting his desk. "I'm getting renewals from brokers on group plans that I simply can't believe. In all my career on the carrier side, I've never seen renewals as high as 60%, 68%, or even 70%."

• Real deal benefits: According to Sigal, one of the biggest barriers to ICHRA adoption is a basic misunderstanding of the product. "The number one thing to understand is that employees are buying an individual plan, which is a major medical plan, just like the group plan they might currently have. It's not a token plan where you get one little office visit and you're done. It's a real plan."

• Compensation conflict: The confusion is often made worse by a core challenge within the traditional advisory channel. Sigal says some brokers may be hesitant to present ICHRA as an option because their compensation is tied to more lucrative group plans. "We rely on the brokers to educate the groups, but brokers want to make money. A lot of them are trying not to sell it because they make more money on the group side."

This education gap has created an opening for a new breed of high-touch ICHRA vendor that combines technology with human support. Modern platforms allow users to easily filter plans by important criteria, like their specific doctors and medications. "That can narrow it down from hundreds of plans to 20," Sigal explains. The technology is often paired with a dedicated, licensed support team that helps employees understand concepts like deductibles and out-of-pocket maximums. The full-service model acts as an outsourced administrative partner, resolving issues like confusing carrier bills or coverage questions all year. "It's the service part that really helps keep it all together," he says. Sigal contrasts this approach with cheaper self-service models where the administrative burden of supporting employees often falls back on a company’s own HR team.

ICHRA's real power, Sigal emphasizes, is its adaptability. "With the ICHRA, there are 11 classes, so we do a lot of class carve-outs." He explains how a business can use these carve-outs to solve specific issues like offering an ICHRA to remote employees while keeping headquarters on a traditional plan, or extending benefits to part-time staff for the first time. That flexibility is resonating, as 44% of large employers are now considering an ICHRA. The market is also maturing, with the average group size for vendors like Gravie growing from 27 to 35 employees.

• Know the limits: Flexibility aside, Sigal cautions that ICHRAs aren't a guaranteed fix for every situation. For example, "if they already have a group plan and the individual plans in that area are more expensive, they're not going to want to pay more for benefits that may not be as good."

• The unvarnished truth: This transparency is central to Sigal's philosophy and what he says makes a consultative partner invaluable. "I do a lot of pros and cons, and I'm honest with people. I'll show them the bad about ICHRA, because I'm not going to waste my time and you don't want to waste yours. Sometimes, it's just not a fit."

Ultimately, Sigal believes the long-term success of ICHRA will depend on the maturation of the entire ecosystem. The current vendor model is a big step up from the clunky HRAs of the past, using virtual accounts to automate payments instead of requiring employees to submit a receipt every month. At the same time, some carriers losing group business are starting to beef up their individual plan benefits and networks to be more competitive. His final advice is a call for continued exploration as the market grows. "Ask a lot of questions, check it out. The space is starting to evolve and it's going to get better as we go."