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I've spent close to 25 years in employee benefits. Long enough to watch this industry solve for choice again and again. New plan designs. New platforms. New ways for employees to pick coverage that actually fits their lives. ICHRA is the latest version of that story, and maybe the biggest one yet. Employers set a contribution. Employees shop the individual market. Everybody wins.
Except there's a piece of this we haven't solved. And it's not a small piece.
The Part Nobody Designed For
Here's what I keep seeing. An employer sets contribution amounts. Employees pick their plans. Then somebody has to actually get the money from the employer to a dozen different carriers, each with their own systems, their own member IDs, their own way of doing things.
Ask yourself: who's untangling that on the other end?
Most of the time, it's a lump sum sent to a carrier, and the carrier is left to figure out who it belongs to. Or somebody on the back end is working through the numbers by hand, trying to make them tie out. I've watched both approaches play out. Neither one scales. Neither one is fair to the carrier, either. They didn't build their operations to reverse-engineer a lump payment against a roster of individual employees they didn't originate.
There’s another cost hiding in that process, too. When premium payments are made by credit card, carriers can be left absorbing processing fees that can run 3–7% of the payment. At ICHRA scale, that’s not a minor transaction cost. It’s another source of friction in a model that already asks carriers to take on more reconciliation work.
That reconciliation burden is the real bottleneck. Not employee interest. Not employer willingness. Payment infrastructure that was never built for a model where one employer's contribution has to fan out across a dozen different carriers and coverage types.
Why It Gets Harder, Not Easier, as ICHRA Grows
This is the part that should worry all of us who believe in ICHRA long term. The problem doesn't stay the same size as adoption grows. It compounds.
One ICHRA employer might have employees spread across ten or more carriers. Multiply that by a broker's full ICHRA book, and the reconciliation problem grows faster than the headcount driving it. Add FSA and HSA contributions, payroll deductions, dental and vision elections, and the payment picture gets more complicated with every employer who signs on.
We've spent so much energy perfecting the plan selection experience. Right instinct. Choice is the whole point. But if the payment layer underneath that choice stays this messy, it puts a ceiling on how far ICHRA can go. A carrier with a bad reconciliation experience is lukewarm on the next ICHRA group. A broker untangling payment discrepancies hesitates before recommending ICHRA to the next client. The friction shows up downstream. It starts upstream.
Payment Deserves the Same Attention We Give Plan Design
I don't think the answer is a better spreadsheet. I think the answer is treating payment as its own piece of infrastructure, one that deserves as much design thought as plan selection gets.
That means reconciling the data at the member level before payment ever reaches the carrier, instead of asking the carrier to untangle it afterward. It means carriers receive a payment file that already tells them who paid, what they paid for, and which coverage it applies to, without relying on credit card payments that can leave carriers absorbing additional processing fees. It means the system can handle multiple payment types on one side, ICHRA dollars, payroll deductions, FSA and HSA funds, and route them to multiple providers on the other, carriers, dental, vision, wherever the money needs to go.
Get that right, and everybody in the chain feels it. Carriers get clean, attributed payments without the reconciliation puzzle or added credit card fees. Brokers get fewer support calls and fewer stalled enrollments. Employers get a smoother rollout of a benefit strategy they were excited about in the first place. Employees, the people this is all supposed to serve, get their coverage active without unnecessary delay.
Where We Go From Here
The demand for ICHRA isn't in question anymore. Employers want flexibility. Employees want choice. What determines how far this model goes next isn't going to be plan design. It's going to be whoever in this industry takes the payment and reconciliation problem seriously enough that carriers stop dreading ICHRA business instead of leaning into it.
At A.E. Perkins, we saw that challenge firsthand, and it’s why we developed PremiumRails, payment infrastructure designed to address the reconciliation problem at the member level before funds reach the carrier. The goal is simple: make the movement of money as seamless as the experience we’ve worked so hard to create around plan choice.
Over the years, I've noticed that the parts of this industry nobody wants to talk about at conferences are usually the parts that decide whether a good idea actually works at scale. Payment infrastructure is one of those parts. It's not the most exciting piece of the ICHRA story. But solving it may be the difference between ICHRA staying a promising idea and becoming something employers, employees, brokers, and carriers can actually count on.
Over the years, I've noticed that the parts of this industry nobody wants to talk about at conferences are usually the parts that decide whether a good idea actually works at scale. Payment infrastructure is one of those parts. It's not an exciting piece of the ICHRA story. But it's the difference between ICHRA staying a promising idea and becoming something employers and employees can actually count on.
