History
The History of ICHRA
ICHRA is often called new, but it''s the product of nearly a decade of health-policy evolution — from QSEHRA in 2016, to the 2019 rule that created ICHRA, to the explosive growth and codification effort underway today. Here''s the timeline, drawn in part from the HRA Council''s Growth Trends report.
By Joe Rosenblatt · Founder & ICHRA Broker, The ICHRA Broker
Key facts
- QSEHRA created
- 2016 (21st Century Cures Act)
- ICHRA rule finalized
- June 2019
- ICHRA available
- January 2020
- HRA Council founded
- 2021
- Growth since 2020
- Adoption up 1,000%+
- On the horizon
- CHOICE Act codification (2025)
Before HRAs: the small-employer coverage gap
For decades, small employers were stuck: group plans were expensive and came with participation minimums, and there was no clean, tax-advantaged way to simply help employees buy their own coverage. That gap set the stage for a new category of defined-contribution health benefits.
2016: QSEHRA is codified
The Qualified Small Employer HRA was included in the 21st Century Cures Act, passed by Congress in December 2016 and signed into law by President Obama. Available as of 2017, QSEHRA gave employers with fewer than 50 employees a capped, tax-free way to reimburse individual coverage — the first mainstream defined-contribution health benefit.
2019: the ICHRA rule
Building on QSEHRA''s success, the Departments of Health and Human Services, Labor, and Treasury — directed by executive order — finalized the ICHRA rule in June 2019. Unlike QSEHRA, ICHRA had no size limit and no contribution cap, opening defined-contribution benefits to employers of every size.
2020: ICHRA becomes available
ICHRA became usable for plan years beginning January 1, 2020. Its arrival meant any employer — from a one-person shop to a company with thousands of workers — could offer tax-free reimbursement for individual coverage instead of a group plan.
2021: the HRA Council forms
As adoption grew, the HRA Council was founded in 2021 to educate the market and support the expanding ecosystem of platforms, brokers, and carriers. Its annual Growth Trends reports have since become the most-cited public data on ICHRA and QSEHRA adoption.
2020–2025: explosive growth
In its first five years, ICHRA adoption rose more than 1,000%, while QSEHRA adoption doubled (HRA Council, 2024–2025). What began as a small-business tool spread across all employer sizes and all 50 states, with large employers becoming the fastest-growing segment.
2023–2025: states step in
States began encouraging adoption directly. In 2023, Indiana became the first to enact an employer tax credit for ICHRA and QSEHRA, and by 2025 Ohio, Georgia, and Texas had introduced their own incentive bills — a sign of growing, bipartisan state-level support.
2025: the push to codify ICHRA
ICHRA still rests on a 2019 regulation, so as of 2025 Congress is considering codifying it in statute as the Custom Health Option and Individual Care Expense (CHOICE) arrangement — which would give it permanent legal footing.
Why this history matters for employers
The trajectory is the point: ICHRA has moved from a niche rule to a fast-growing, bipartisan-supported benefit with durable adoption and near-90% renewal rates. For an employer weighing it, that maturity and momentum are reassuring signals rather than the risks of an untested idea.
About this timeline
Policy dates reflect the public record, and adoption figures come from the HRA Council''s Growth Trends for ICHRA & QSEHRA, Vol. 4 (2024–2025). This is general educational information, not legal advice; verify current law for decisions.
Want this set up for your team?
Get a Free QuoteFrequently asked questions
The ICHRA rule was finalized in June 2019 by the Departments of HHS, Labor, and Treasury, and ICHRA became available for plan years starting January 1, 2020.
Joe Rosenblatt — Founder & ICHRA Broker, The ICHRA Broker
Joe Rosenblatt is the founder of The ICHRA Broker, an independent ICHRA brokerage that helps small businesses offer tax-free health benefits without a group plan. He works directly with employers and their advisors on ICHRA and QSEHRA setup, plan design, and compliance.
Health benefits the modern way
Tell us about your team and get a free, no-obligation ICHRA quote — usually within 24 hours.