Why Your Group Renewal Just Went Up Again — and What ICHRA Changes

If you just opened your group health renewal and felt your stomach drop, you’re not alone. Year after year, small and mid-sized employers get the same letter: rates are going up, again, and there’s rarely a good explanation beyond “that’s just what happened in the market this year.”

Traditional group health insurance ties your cost to a pool of people you didn’t choose, in a market you don’t control. One employee’s major diagnosis, one bad claims year, one carrier’s underwriting decision — and your whole company absorbs the increase at renewal, whether or not anything about your business changed.

There’s a different model, and it’s been growing quickly for a reason: the Individual Coverage Health Reimbursement Arrangement (ICHRA).

How it’s different

Instead of buying a group policy and hoping the renewal is reasonable, an ICHRA flips the structure:

• You decide on a fixed monthly contribution per employee (or per employee class).
• Employees use that contribution to buy an individual health plan that fits their own situation — their doctors, their family size, their budget.
• You reimburse them, tax-free, up to the amount you set.

Your cost is the number you chose. It doesn’t move because of someone else’s claims history. There’s no renewal shock, because there’s no group renewal to shock you.

Why this matters right now

2026 has been a volatile year for health insurance pricing generally, on both the group and individual market side. Employers who are still on a fully insured group plan are, more than in past years, at the mercy of what carriers decide to charge based on factors well outside their control.

ICHRA doesn’t eliminate the underlying cost of healthcare. But it does put you back in charge of your own budget line, instead of finding out what next year costs when the renewal letter arrives.

Is this actually available to a business your size?

Yes. Unlike some benefit structures that only make sense above a certain headcount, ICHRA works for a five-person company and a five-hundred-person company alike. We’ll get into exactly how the math changes with size later in this series — but the short version is: there’s no minimum group size, and no carrier-imposed participation requirements to work around.

If your renewal letter just landed and the number made you wince, this might be the right time to look at whether there’s a better way to structure the benefit entirely — not just shop for a slightly cheaper version of the same plan.

Curious what this could look like for your team? Schedule a free consultation or call us at (952) 210-9456. We’ll walk through your current renewal and show you what a defined-contribution model would actually cost.