Traditional group insurance and an ICHRA solve the same problem — covering your people — in fundamentally different ways. One buys a single plan for everyone and absorbs whatever the carrier charges. The other hands each employee a fixed, tax-free budget to buy the plan that fits them. Here's how they actually compare.
$26,993
Avg. annual family group premium (2025)
+6%
Group premium increase in the last year
20–30%
Typical employer savings under ICHRA
The core difference: defined benefit vs. defined contribution
A group plan is a defined benefit — you promise a specific plan, and your cost is whatever it takes to fund it. When the carrier raises rates at renewal (family premiums rose 6% in 2025, to nearly $27,000), that increase is yours to absorb or pass on.
An ICHRA is a defined contribution — you promise a specific dollar amount. Employees use that tax-free allowance to buy their own individual plan. Your cost is exactly what you set, and it doesn't move unless you decide to move it.
Where ICHRA wins
- Predictable cost. You set the allowance and cap your spend. No surprise renewals, no double-digit increases you didn't choose.
- Real plan choice. Employees pick from the full individual market and keep their own doctors — instead of one network chosen for everyone.
- No participation minimums. Group plans often require 70%+ participation. ICHRA has no such hurdle, which matters for small or distributed teams.
- Works at any size, any geography. Available to employers of any size since 2020, and ideal for teams spread across multiple states.
- Portability of the relationship. Employees own their plan, so coverage isn't disrupted the moment they change roles.
Where a group plan may still win
We'd rather you make the right call than the ICHRA call. A traditional group plan can still make sense when:
- Your team strongly values a single, employer-curated plan and doesn't want to shop for their own.
- You have a large, concentrated workforce in one rating area where a group plan is priced competitively.
- You rely on group-only features — like certain large-group network arrangements — that matter to your specific population.
The honest takeFor most small and mid-market employers facing another 6%+ renewal, the math and the flexibility favor ICHRA. But the right answer depends on your census, your budget, and your team — which is exactly what we'll model with you, no pressure.
At a glance
- Cost model: Group = variable, carrier-set · ICHRA = fixed, employer-set.
- Plan choice: Group = one plan/network · ICHRA = full individual market.
- Admin burden: Group = renewals & negotiations · ICHRA = handled by Choice (documents, reimbursements, testing, reporting).
- Primary care: Group = standard copays · ICHRA with Choice = unlimited embedded Direct Primary Care.
Want the numbers for your own team? Run your census through the savings calculator or download the employer one-pager.