Hartford Business Journal

16 HARTFORDBUSINESS.COM | OCTOBER 19, 2026 Premium Pressure Rising insurance costs push CT employers to consider ICHRAs John Carbone, Access Health CT's director of SHOP and product development, says rising health insurance costs are prompting employers to consider arrangements that let workers choose their own individual coverage. HBJ Photo | Steve Laschever By David Krechevsky davidk@hartfordbusiness.com W hen Watertown-based BTS Graphics & Printing faced rising health insurance costs, the seven-employee company decided to replace its traditional group plan with an alternative that allows workers to purchase their own coverage. The switch, made in September, reduced the printing company's monthly insurance expense from about $3,200 to $1,000, according to manager Joann Bowyer. "We're very happy," Bowyer said, although she acknowledged the company has been using the new arrangement for only about a month. BTS Graphics is among a growing number of Connecticut businesses turning to individual coverage health reimbursement arrangements, or ICHRAs, as employers search for ways to control rising health insurance expenses. Now, a new state tax credit worth up to $1,000 per covered employee annually could encourage more small businesses to adopt the model. The potential savings from ICHRAs come with trade-offs. Employees must choose their own plans, which can be challenging for workers unfamiliar with shopping for health insurance, and rising individual-market premiums can offset some of the savings for both employers and employees. Access Health CT, the state's health insurance marketplace, currently has 167 employer groups covering 1,001 members enrolled in ICHRAs through its BusinessPlus platform, according to John Carbone, the exchange's director of the Small Employers Health Options Program (SHOP) and product development. Carbone said about 500 addi- tional quotes are "in the pipeline," although those have not yet translated into enrollment. Carbone said he thinks ICHRAs are "going to be the model" for small-group insurance in the next three to five years. Different approach Unlike traditional employer-sponsored group insurance, an ICHRA allows busi- nesses to provide tax-free reimburse- ments that employees can use toward purchasing individual health plans. Employers establish their contribu- tion amounts, while employees select coverage based on their doctors, prescription needs, family circum- stances and budgets. Access Health CT launched Business- Plus in July 2025, offering ICHRAs under the name CHOICE Arrangements along- side traditional small-group coverage. Carbone said employers increas- ingly want greater flexibility and more predictable health benefit expenses. He estimated that about 70% of the platform's ICHRA business comes from manufacturing and other blue- collar employers, with the remainder coming from white-collar businesses. The state is now offering an addi- tional incentive to businesses with 50 or fewer employees. Approved during the 2026 legislative session following a proposal by Gov. Ned Lamont, the Connecticut Small Business ICHRA Tax Credit provides up to $1,000 per covered employee annually for the first two consecutive tax years an eligible employer offers a qualifying arrangement. The credit equals the lesser of an employer's total qualified contributions or $1,000 multiplied by the number of covered employees. A total of $5 million is available statewide annually, with credits reserved for qualified businesses on a first-come, first-served basis. Businesses must establish their ICHRA through BusinessPlus and apply through the state Department of Revenue Services. Access Health CT verifies qualifying arrangements and employer contributions. Employers report savings Bowyer said the cost of BTS Graphics' previous small-group plan was the primary reason for switching to an ICHRA. The arrangement also allowed some employees to obtain federal subsi- dies instead of accepting employer contributions. Carbone said two BTS employees declined the company's ICHRA offer and qualified for federal premium tax credits. Under federal affordability rules, their cost for coverage after the employer's contri- bution was too high relative to their household income. Workers cannot receive both ICHRA contributions and federal premium tax credits for the same coverage period. Bowyer said employees generally have been receptive to the change, particularly younger workers. She esti- mated that some are saving about $150 per pay period on health insurance, although she did not specify whether those savings resulted from employer contributions or federal subsidies. The availability of Connecticut's new small-business ICHRA tax credit was another factor in BTS Graphics' deci- sion to switch from traditional group coverage, Bowyer said. A much larger Milford manufac- turer, Baron Technology Inc., known as Baron Engraving, also reported substantial savings after switching to an ICHRA in January. Michelle Chapman, the company's director of finance and administration, said Baron faced a proposed 56% increase in its traditional group insur- ance premiums, potentially pushing annual costs to nearly $1 million. The company's current insurance bill is about $30,000 a month, or $360,000 annually, she said. Baron has 75 employees and does not qualify for the new small-business tax credit. The company was unaware of the incentive when it adopted its HOW IT WORKS An individual coverage health reimbursement arrangement, or ICHRA, allows an employer to reimburse employees tax-free for individual health insurance premiums and other qualifying medical expenses, up to an amount the employer sets. • Employers set a monthly contribution amount per eligible employee. • Employees select their own individual health insurance plans. Those using Access Health CT's BusinessPlus platform can shop for coverage through the state's health insurance marketplace. • Employees pay any premium costs above the employer's contribution.

• Cover