Small businesses power our state’s economy, employing 1.6 million – or 46% – of Virginia employees.

That’s why we must help small businesses stay competitive to keep our economy thriving. And we can help them control one of the rising costs threatening their budgets: quality healthcare benefits to attract and retain workers.

In the U.S., 2026 premiums for traditional employer plans reached $37,824 for a family of four. No wonder the availability and affordability of healthcare is now the top concern among American households, at 61%, and why 1 in 3 people are making trade-offs, like skipping meals and utilities, to pay for healthcare.

Employers are doing what they can to help their teams, but they are facing healthcare costs that are simply untenable for their budgets. In Virginia alone, employer contribution to healthcare dramatically increased by 51.8% from 2013 to 2024, according to KFF.

At the center of this conundrum is an insurance model that made sense when it was introduced in the 1940s, when companies competed for workers by offering group healthcare coverage as a differentiator. Decades later, it’s failing to keep up with the evolving market dynamics of today’s business landscape.

Today, there’s a better insurance model available to our business community – one that’s already gaining momentum with employers of all sizes and saving them and their employees money. It’s ICHRA, or the Individual Coverage Health Reimbursement Arrangement.

What is ICHRA and how does it work?

ICHRA allows businesses to contribute a set, tax-free amount toward some or all the premium employees pay for health insurance they buy from the individual market (ACA). Any employer with at least one eligible employee can offer an ICHRA plan.

For businesses in Virginia, the savings opportunity is undeniable. In almost every Virginia county, an individual plan is cheaper than a comparable small group plan. Employers can save on their healthcare costs, while still providing a robust coverage benefit to their workforce. Instead of limited group options, employers unlock choice, giving their teams the ability to shop hundreds of plans to find the personalized coverage that’s right for them.

It’s not complicated. The individual market works like the online marketplaces workers already know, like Amazon, Airbnb, or Carvana. Employees can search for a plan, compare costs, read provider reviews, and check quality scores in one place. AI-driven tools can help match coverage to an employee’s specific health needs. And, like home or auto insurance, brokers can give one-on-one guidance, if needed.

The data shows employees love the concept:

• About 90% of employees on an ICHRA say their coverage is better than their previous group plan.
• Employee trust in benefits nearly doubled from roughly 25% to 55% when they have a positive experience with healthcare benefits.
• And 91% of employees report overall satisfaction with their ICHRA plan.

Why is ICHRA good for employers AND employees?

For employers, ICHRA:

• Removes the administrative burden on the HR team.
• Makes that budget item predictable because they get to decide in advance how much to contribute.
• Spreads the insurance risk over millions of people in the individual market versus one company’s workforce, protecting businesses from high-cost health events.

For employees, ICHRA:

• Gives them choice to get the coverage they need, with the benefits and doctors they want, at a cost they can afford.
• Offers flexibility in switching plans during open enrollment to adapt to what’s happening in their life.
• Unlocks personalized coverage not offered under group coverage like condition-focused plans that can save members up to $800 a year, while managing their diabetes, COPD/asthma, cardiovascular-kidney-metabolic syndrome, or menopause symptoms.*

The bottom line: ICHRA can lead to substantial savings for businesses while expanding employee choice. Here are some case studies to prove it:

• A 500-person company with a $27K average per employee premium saved $2.5M in one year.
• A 450-person tech firm cut $1M in premiums and put 25% more into employee 401(k) contributions.
• A small county government in West Virginia saved $700,000, and most employees saw their premiums drop to nearly nothing.

Blueprint Virginia 2035 recommends that we “support employer-sponsored health coverage and the important role it plays for employers to offer health benefits to their employees.” To help with that goal, let’s educate our business community about ICHRA and ask our state legislators to adapt this national ICHRA model law for Virginia and encourage local businesses to adopt it.

Oscar Health is proud to serve approximately 3.2M consumers on the individual market today, and we will continue advocating for an evolution of how Americans choose and buy the insurance they need and can afford.

*Source: Savings are based on an ACA Oscar Health condition-focused plan with a CSR 150.

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