How ICHRA Fares Heading into 2026

November 13, 2025

Key takeaways:

ACA enhanced tax credits are still uncertain beyond 2025, creating volatility in signups and affordability
Group health premiums are rising at rates similar to ACA premiums, increasing pressure on employers to explore alternatives
Off-exchange plans are a possible affordability solution, especially in states where on-exchange silver premiums remain elevated
Pending CHOICE legislation may expand ICHRA adoption incentives for employers
Overall, ICHRA remains a highly competitive option for offering health benefits in 2026

The health benefits landscape in 2026 is more unpredictable than it has been in years. After 50 days of back-and-forth in Washington, lawmakers seem to have finally settled a deal to re-open the government — but the future of ACA enhanced tax credits remains up in the air.

Marketplace premiums are climbing, group plan renewals remain high, and employers are feeling the squeeze. Meanwhile, off-exchange plans are quietly becoming more competitive, and pending CHOICE legislation could solidify ICHRAs as a long-term solution for employer coverage.

While the landscape is shifting, one thing is clear: employers still need a stable, flexible way to offer meaningful benefits. And ICHRAs remain one of the most reliable, future-ready options on the table.

ACA Enhanced Tax Credits Still Uncertain

In our recent blog, “What Individuals and Employers Should Know About 2026 ACA Changes,” we broke down the growing uncertainty around enhanced premium tax credits and how their potential expiration could impact both individual consumers and employer-sponsored strategies. While the government did manage to reach a deal to avoid a shutdown, the agreement only included a promised vote on extending the enhanced ACA tax credits. That means the future of these subsidies is still far from settled.

Most insurers have already submitted their 2026 rate filings under the assumption that enhanced tax credits will not be renewed. This gives employers a relatively solid foundation to start planning — and it means that getting an ICHRA quote now will still be reliable, even if Congress continues debating subsidy extensions into next year.

Learn more about ICHRA and get your personalized quote.

Group Health Plan Renewals Still High

Even though much of the attention is focused on the individual marketplace right now, employer-sponsored group health plan renewals for 2026 continue to arrive with steep increases. According to Mercer, employers are bracing for a 6.5% increase in health benefit costs. And KFF released a shocking report highlighting how much annual premiums have increased for individuals and family plans, jumping to $9,325 for self-only coverage and nearly $27,000 for family coverage. Their data shows that premiums have increased by 6% for three years in a row, making this a sustained trend of cost growth that employers can no longer dismiss as temporary.

Off-Exchange Plans Offer a Silver Lining

Off-exchange plans are individual health insurance plans purchased directly from an insurer or broker instead of through the public marketplace. ICHRA providers can offer ACA-compliant off-exchange plans that meet the same essential health benefits as on-exchange.

Off-exchange plans avoid some of the added costs of marketplace participation, like certain government fees and administrative requirements. A recent article by Employee Benefit News highlighted just that, saying “While preliminary rates are subject to change, in every state except Florida, the smallest rate increases are observed in the off-exchange plans.”

Employers choosing to administer their ICHRA with Benafica may find this especially reassuring. Our platform exclusively features off-exchange, ACA-compliant plans. That means employees can access competitive pricing without marketplace markup, and employers benefit from more stable, transparent cost comparisons year after year.

Pending CHOICE Legislation

The health benefits world got a jolt of excitement earlier this year when the House version of the One Big Beautiful Bill (OBBB) included legislation to make ICHRA permanent law and rebrand it as CHOICE: Custom Health Option and Individual Care Expense. The measure would have codified ICHRA into federal statute instead of leaving it as a regulation that future administrations could change or repeal, but it was ultimately stripped from the Senate’s version of the bill and not passed.

CHOICE legislation would:

Codify ICHRA into federal law
Rebrand ICHRA as CHOICE: Custom Health Option and Individual Care Expense
Shorten the employee notice period (to switch to CHOICE) from 90 days to 60 days
Offer a monthly tax credit of $100 per head (1st year) and $50 per head (2nd year) for small businesses to adopt CHOICE
Direct the federal government to actively promote CHOICE arrangements for small employers and provide educational materials

Since July, advocates have re-introduced CHOICE legislation, which has stalled as proposed legislation while the government has been negotiating the shutdown. For the time being, the existing ICHRA framework remains the same. But employers and brokers who follow the space should continue to track its progress, as its passage would bring stability and enhancements to what currently exists, with better promotion and incentives by the government to adopt it as an alternative employee healthcare choice.

Explore ALL Your Options for 2026

Everything in the health benefits world is connected. The uncertainty around enhanced premium tax credits casts a shadow over on-exchange plans, but also over rising group insurance renewals. While carriers and markets react, employers can stay ahead of the curve by making sure they’re not locked into only one path.

“Our clients often tell us the greatest value came from simply seeing their full set of options,” says Karie, Senior Sales Representative at Benafica. “Make sure you have all your options on the table for 2026 — and that starts with comparing ICHRA side-by-side with your current group plan.”