Financial
2025 Small Group vs. Individual Premium Prices By State
This report examines the cost differences between small group and individual plans across states, based on Ideon's 2025 ICHRA Map.
January 8, 2025
Individual Coverage Health Reimbursement Arrangements (ICHRAs) have become popular because they offer flexibility, potential cost savings, and the ability to customize plans based on employee needs. However, whether ICHRAs are a good fit often depends on the specific market conditions in different regions.
Regional factors like county-level premium differences, state policies, and the needs of multi-state workforces can all affect the value of ICHRAs. This report examines Ideon’s 2025 ICHRA Map, exploring the states and counties where ICHRAs are most effective, areas with mixed outcomes, and regions where small group plans may remain the better choice. These insights can help employers and brokers make smarter decisions about their benefits strategies.
Certain states stand out as particularly ICHRA-friendly, showcasing significant cost savings and favorable market conditions that make them ideal for employers exploring innovative benefit strategies.
According to Ideon's latest map and 2025 Landscape Report, 33 states are now identified as "ICHRA-friendly" for Bronze-level plans, marking an increase from 31 states in 2024, while 21 states exhibit favorable market dynamics for Silver-level plans, up from 17 states last year.
This section highlights the most competitive states for ICHRA adoption in 2025, including Ohio, Georgia, Indiana, Kentucky, and South Carolina, as well as other promising regions like Washington, Colorado, New Mexico, Missouri, North Carolina, and Virginia. These states demonstrate considerable cost differences between individual and small group premiums and reflect broader trends in employer and employee preferences.
Ohio stands out as the leader among ICHRA-friendly states, with individual premiums 32% to 63% less expensive than small group plans. These impressive savings make Ohio the most cost-competitive state for ICHRA adoption in 2025.
Cost Savings Highlights
Several counties in Ohio, including Brown County and Clermont County, exhibit cost savings of 63% for individual plans compared to small group plans. For a 50-year-old seeking a Silver plan in the southern part of the state, individual premiums are $791 less expensive than equivalent small group options.
Georgia is one of the top ICHRA-friendly states, with individual premiums ranging from 2% to 58% less expensive than small-group plans. This variability offers employers across the state opportunities to adopt flexible, cost-effective health benefits tailored to local market conditions.
Fulton County and Atlanta: Individual plans are 20% cheaper than small group options in Fulton County, home to Atlanta. This significant cost difference highlights Atlanta as a prime location for ICHRA adoption. According to the latest report by the HRA Council, the broader Atlanta metro area has emerged as a hotspot for ICHRA adoption.
Indiana stands out for ICHRA adoption, combining notable cost savings with proactive policy measures to encourage employer participation. Individual premiums in Indiana are 18% to 45% less expensive than small group plans, offering a compelling financial advantage for employers.
County Highlights
In Rush County, the state’s leader in cost savings, individual premiums for a 50-year-old Silver plan are $47 less than small group plans at the highest savings of 45%, while the lowest savings in the state are 18%, equating to $128 less for the same plan.
Policy Incentives
The implementation of House Bill 1004 provides a unique incentive for small and mid-sized employers. It offers tax credits of $400 per covered employee in the first year of ICHRA adoption and $200 in subsequent years. This policy enhances the already significant savings opportunities, making Indiana particularly attractive for businesses transitioning to individual plans.
Kentucky presents substantial opportunities for ICHRA adoption, with individual premiums priced 11% to 45% lower than small group plans. This range of savings allows employers to offer competitive health benefits while optimizing their budgets.
County Highlights
The northeastern part of the state, particularly Lawrence County, Carter County, and Boyd County, leads in cost savings. Individual premiums are 45% less expensive than small group plans. For a 50-year-old seeking a Silver plan, this translates to $399 less expensive than small group options.
South Carolina is a top-tier state for ICHRA adoption, with individual plans 7% to 45% less expensive than small group options, depending on the county. These savings make the state an ideal environment for employers seeking cost-effective healthcare solutions.
County Highlights
In Greenwood County, individual premiums offer the highest savings, being 45% less expensive, which translates to $390 less for a 50-year-old Silver plan. On the lower end, counties like York County show savings of 7%, with individual premiums being $57 less expensive than small group plans.
Additional ICHRA-friendly states—Washington, Colorado, New Mexico, Missouri, North Carolina, and Virginia—offer meaningful cost savings across all counties, making them attractive options for employers transitioning from small group plans.
These states showcase savings ranging from 2% to 31%, with standout regions such as Colorado achieving up to 31% savings. States like New Mexico, Missouri, North Carolina, and Virginia consistently demonstrate savings between 17% and 26%. In North Carolina and Virginia, individual premiums for mid-level plans are as much as $140 to $390 less per month, highlighting the significant potential for employers to reduce benefits costs.
Adoption rates are rising in major urban areas, such as the Seattle metro area in Washington, reflecting the broader trend of employers embracing ICHRAs to capitalize on flexible, cost-effective solutions for employee healthcare.
In these states, individual plans offer meaningful cost savings compared to small group plans. Depending on the size of the employer and the age of employees, switching from small group to ICHRAs can result in significant financial benefits.
Health insurance costs are graded at the county level, meaning that while specific trends may emerge across state borders, the ultimate feasibility of ICHRA adoption often depends on the specific counties where employees reside. This variability creates a mixed landscape for several states, where some counties are favorable for ICHRAs, and others are more competitive for small group plans.
County-Level Examples
For example, in Illinois, the cost dynamics vary widely:
States with Mixed County Dynamics
Each of these states has a mixture of counties where individual plans may be more or less expensive than small group options, depending on local market conditions, including Nebraska, Kansas, Texas, Florida, Pennsylvania, Arizona, and Montana.
For employers operating in these mixed states, the decision to adopt ICHRAs must consider the specific counties where employees are located. While ICHRAs may offer significant benefits in some regions, small group plans may still be the more cost-effective choice in others. This underscores the importance of leveraging detailed, county-level insights when designing health benefits to ensure optimal cost-efficiency and employee satisfaction.
While many states demonstrate the cost-saving potential of ICHRAs, some regions remain less favorable due to the higher costs of individual plans compared to small group options. These areas highlight where small group plans remain the more competitive choice, posing challenges for widespread ICHRA adoption.
California, Nevada, Utah, Wyoming, South Dakota, Oklahoma, Texas, Tennessee, Alabama, New Jersey, and Oregon are states where individual plans are often less competitive. These states exhibit market dynamics where small group plans are generally more cost-effective, discouraging ICHRA adoption in certain counties. Employers in these regions may face difficulty achieving the cost savings often associated with transitioning to ICHRAs.
Some counties within these states show stark contrasts in cost dynamics, where small group plans significantly outperform individual plans:
California stands out as a unique case in the ICHRA landscape, as individual plans are generally less favorable compared to small group plans in most counties. For example, in San Bernardino County, individual premiums are 32% more expensive, and in Mono County, they are 41% more expensive than small group options. In the Bay Area, counties like San Francisco, Alameda, and San Mateo see individual premiums 21%, 14%, and 15% more expensive, respectively. St. Clara County is the only exception in the Bay Area, where individual plans are 13% less expensive. In Los Angeles County, individual premiums are 17% less expensive, making it one of the few bright spots in the state.
Despite the higher cost of individual plans in most regions, California continues to see significant ICHRA adoption, particularly among companies based in San Francisco and Los Angeles. This trend is primarily driven by the presence of multi-state employers with workers spread across the country. These businesses benefit from the flexibility and employee choice that ICHRAs provide, allowing them to offer tailored plans that accommodate employees in and out of state. While California may not be inherently ICHRA-friendly in terms of cost savings, the state demonstrates how the broader advantages of ICHRAs—such as flexibility, customization, and plan portability—can still drive adoption in less favorable markets.
Regions such as Atlanta, South Carolina, the Bay Area, Twin Cities, and the NY Metro highlight the success of ICHRAs in addressing the challenges of traditional small group plans. Employers in these areas benefit from enhanced coverage options, improved retention, and tailored solutions that adapt to regional and demographic needs.
This section tackles common questions brokers have about ICHRA adoption, like which areas are most ICHRA-friendly, how to make them work in tricky regions, and what to keep in mind for multi-state employers.
States are considered ICHRA-friendly when individual premiums are significantly less expensive than small group plans, providing cost-saving opportunities for employers. Favorable policies and robust individual markets also play a role.
Yes, but employers must carefully evaluate local market conditions. In mixed states like Illinois or Florida, where cost dynamics vary by county, a strategic approach is essential to ensure cost-effectiveness.
While individual plans may be more expensive in some counties, multi-state employers often adopt ICHRAs for their flexibility and ability to provide consistent benefits to employees across the country.
ICHRAs provide significant flexibility for employers with teams spread across different regions or states. By allowing employees to choose their own health insurance plans from the individual market, ICHRAs ensure that coverage can be tailored to meet local needs and costs. This flexibility is particularly valuable for multi-state employers, as health insurance premiums and options vary significantly by region and county.
Brokers should use this report to assess the ICHRA favorability of their region or the regions where their clients and employees are based. Understanding local dynamics, such as cost advantages of individual plans over small group coverage, is crucial.Liferaft simplifies this process by offering tools to compare ICHRAs with small group plans, providing detailed employee-by-employee breakdowns of the best plan options and costs. This ensures brokers can deliver cost-effective, tailored solutions that maximize savings and satisfaction.
Our team knows the ins and outs of the health insurance marketplace and will guide you towards the solution that make the most sense for your business and your team. Come with questions! Our experts are happy to dig into the details to get you the clarity you need.
During the call, Liferaft will run a cost-benefit analysis on your company's current healthcare spending and show you different ways you can save—without sacrificing plan quality. After your consult, Liferaft will design a unique plan for your employee's health insurance, including suggested plans and accounts, plan policy documents, and the annual budget.
