For independent financial advisors advising business-owner clients on total compensation, a structural shift in employer-sponsored health benefits is gaining momentum—one that echoes the retirement industry's transition from pensions to 401(k)s. The model, known as an Individual Coverage Health Reimbursement Arrangement (ICHRA), allows employers to make fixed monthly contributions that employees use to purchase individual plans on the Affordable Care Act (ACA) marketplace.
Jack Hooper, CEO of Take Command, a Dallas-based ICHRA administrator, has been advocating for this approach directly with the Trump administration. In a recent meeting with Dr. Mehmet Oz and senior officials at the Centers for Medicare & Medicaid Services (CMS), Hooper discussed what the administration now calls "CHOICE arrangements"—its rebrand of the ICHRA model that has been available since 2020. The parallel to retirement planning is deliberate: employers contribute a set amount, and employees choose how to allocate it, much like a 401(k) plan.
"Employers get it faster than their brokers or the insurance companies," Hooper told InvestmentNews. "They're like, 'Oh yeah, this is what I do for retirement—we just give people money and they invest it. Why didn't we do that before?'"
From defined benefit to defined contribution
Under traditional group health insurance, employers act as underwriters, selecting plans, absorbing cost risk, and managing annual renewals. ICHRAs replace that with a defined monthly contribution per employee, which the employee uses to buy individual coverage. This mirrors the shift from defined-benefit pensions to 401(k)s that reshaped retirement planning a generation ago. Employers move from open-ended liability to a fixed, predictable cost, while employees gain portability and choice. A new category of administrator—Take Command among them—handles the complexity between the employer's contribution and the employee's coverage decision.
According to the HRA Council's 2025–2026 annual report, more than 20,000 U.S. businesses now offer an ICHRA, a 53% increase from 2025, with approximately one million Americans receiving health benefits through the model in 2026. Employer-sponsored family premiums averaged approximately $26,993 in 2026—up about 26% in five years, outpacing wages and inflation, according to the same report. These figures underscore the cost pressure driving employer interest.
What this means for business-owner clients
For advisors with small-business and mid-market owner clients, the implications are significant. A business owner facing double-digit annual premium increases on a group health plan is absorbing an open-ended liability that compounds year after year. An ICHRA converts that liability into a budget line—predictable, adjustable, and disconnected from the claims experience of individual employees. "They don't want to be managing a health plan," Hooper said. "If they can get out of it but still take care of their employees and provide a benefit, they'll jump out right away."
The cost predictability argument is particularly resonant for owner-clients approaching succession or sale, where unpredictable benefit liabilities can complicate valuations. A defined contribution structure is cleaner to underwrite, easier to model, and more transferable to a new owner. Advisors can help clients model the transition, assess ACA market quality, and stress-test contribution strategies over time—a service most benefits brokers are not yet equipped to deliver.
The ACA dependency—and what advisors need to flag
The critical caveat: the model's quality and affordability depend entirely on a healthy ACA individual market. The administration promoting CHOICE arrangements has spent years working to weaken that same marketplace. Hooper raised this tension directly with Dr. Oz and made the case for restoring Cost-Sharing Reduction (CSR) payments—federal subsidies for lower-income workers that help cover copays and deductibles, which the first Trump administration cut. Research from both sides of the aisle, he said, shows that cutting CSR payments increases the federal deficit, and restoring them now appears in Trump's own healthcare plan. "If we can just have predictability and restore those things, we can save the federal government money and bring costs down for everybody," he said.
ICHRA works best where individual market competition is strong and plan options are robust. Before recommending the model to a client, advisors should assess the individual market quality in the geographies where their employees live, particularly for clients with geographically dispersed workforces or significant lower-wage employee populations where ACA affordability thresholds matter most.
The broker parallel—and what it means for advisory practices
Hooper's message to benefits brokers translates to the advisory context. He says that those who thrive under the defined contribution model are those who think like wealth managers—helping clients set contribution levels, model costs over a three-to-five-year horizon, and adjust year by year—rather than those whose value proposition is simply running annual quotes. "Forward-leaning brokers are starting to figure it out," he said. "Those that are stuck to 'let me just run quotes'—they're going to get run over."
For financial advisors already providing holistic planning to business-owner clients—integrating retirement plan design, executive compensation, and business succession—the ICHRA conversation is a natural extension. As health benefits rival 401(k)s as a top employee benefit, advisors who can navigate this shift will add value. However, the persistent drag of healthcare inflation and retiree fears about health costs underscore the need for careful planning. The gap between optimism and financial health among Americans further highlights the importance of predictable benefits.
