As recently as three or four years ago, everything came crashing down for the markets set up by Obamacare. Carriers swiftly exited markets. PPOs disappeared. Options tightened. Broker commissions dried up. Businesses were lost. Many had little faith that the ACA markets would ever overcome their early shortcomings—a major hurdle for the widespread adoption of the recently available types of health reimbursement arrangements.

If you take a closer look, however, there are bold indicators pointing toward a stabilizing individual market, first among them are the MLRs of carriers in the individual market and the rebates being provided to policyholders. As an HRA administrator dependent on the health of the individual market, these changes have our rapt attention.

Carrier exits that narrowed the market in the past seem to have reached a turning point, with Anthem and Cigna expanding their footprints and states like Washington adding carriers for 2021. Another notable harbinger is United returning to the state of Maryland. And that's not all. Rate hikes have slowed or reversed. Commissions trend upward. The market has begun to bounce back. Our ongoing talks with carriers and brokers show that many are taking a fresh look at a market once written off.

Now enter COVID-19, a veritable wrecking ball and an unexpected accelerant. Kaiser Family Foundation estimates that upwards of 27 million will lose their employer-sponsored health insurance in the fallout of the pandemic—a stark and sobering number. But what happens if these laid off workers buy individual insurance plans on the ACA market with the possibility of subsidies? The market will grow. A surge in healthier individuals will help keep costs low and foster carrier competition. More participants will translate to more options for everyone, a welcome safe harbor for those not eligible for COBRA or Medicaid.

And what happens from there? With luck, these workers will be rehired or find new jobs in the coming weeks and months and can literally bring their health plan to work, skipping the whole employer-sponsored health plan altogether. Many business owners we are speaking with plan to reimburse this already insured workforce for health expenses through a Qualified Small Employer HRA (QSEHRA) or an Individual Coverage HRA (ICHRA)—both budget-friendly and tax-advantaged options that offer a more predictable, efficient, and affordable alternative to traditional employer-sponsored plans. The employer sets their monthly budget and design criteria, workers choose the plan that works best for them.

For brokers and employers alike, the transition from familiar group coverage to a new model of benefits can be daunting. Many employers that have been forced to make cuts are eyeing ICHRA's New Hire Provision as a graceful segue into this new 401(K) style of benefits, a rule that allows them to offer a group plan to employees hired before a certain date and an HRA to those hired after.

HRAs still face their fair share of challenges—a general lack of awareness, confusion over the (almost) endless design customizations, and resistance to change—but it's clear the shifting market is increasingly capable of fostering the trend. Our take is that as State Departments of Insurance continue to release carrier filings, we'll see more big players get off the sidelines. It's time to cautiously dust off those old individual market playbooks.

Kyle Estep is director of business development at Take Command Health.

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A look at the individual market: Indicators point toward stabilization

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