Small Employers Are Exiting Group Health. ICHRAs Are Pointing Workers Toward DPC.

Every year around renewal time, a small business owner with 15 or 20 employees gets the same conversation with their broker. Premiums went up again. This year it’s 9%. Last year it was 7%. The plan is about to change because the carrier adjusted the network anyway.

Some employers are done with that conversation.

Individual Coverage Health Reimbursement Arrangements, ICHRAs for short, have been available since 2020. Adoption has been slow, but it’s picking up as group health costs push smaller employers toward the exit. Instead of managing a plan, an employer using an ICHRA gives each employee a monthly stipend. The employee shops for their own marketplace coverage and uses the funds to pay for it.

The employer steps back from insurance administration. The employee gets more choice in what they buy.

The DPC piece got more interesting in 2026.

The Coverage Stack

When a worker uses an ICHRA stipend to buy a bronze-tier marketplace plan, two things opened up this year that weren’t available before. Bronze and catastrophic plans on the exchange became HSA-compatible under the One Big Beautiful Bill. And DPC membership fees became eligible as HSA-qualified medical expenses, capped at $150/month for individuals.

Put those together: the ICHRA stipend covers the marketplace premium, the employee opens an HSA alongside it, and DPC fees come out of the HSA before taxes. The employer never directly touched the DPC piece. The employee built their own coverage stack.

Some employers are going further, pairing ICHRAs with health sharing arrangements plus DPC. Health sharing contributions can’t flow through HRAs, so that piece requires after-tax dollars. But the DPC membership stays tax-advantaged through the HSA. Benefits advisor Cristy Gupton described the appeal in a piece for DPC News this week: some employers want to “get out of the insurance business and just give employees funds for self-directed coverage choices.”

For companies with 50 or more workers, a properly structured ICHRA satisfies the ACA employer mandate. No shared-responsibility penalty. No carrier relationship to manage on an ongoing basis.

What It Means for DPC Practices

The employer shift toward DPC is already large through other routes. According to Hint Health’s 2026 Trends Report, employers now fund 60% of active DPC memberships, the first time employer-sponsored memberships have topped individually purchased ones. Over 7,200 employers are offering DPC as a benefit in some form.

ICHRAs add a different pathway into that count. An employer doesn’t need to sign a contract with a local DPC practice, negotiate a per-employee rate, or figure out which physicians are in range for a distributed workforce. The employee shops on the marketplace, opens an HSA, and enrolls in a DPC practice on their own.

For DPC practices, that changes the patient arrival story. The patient shows up with HSA funds already allocated for a membership and an explanation that may start with “my employer gave me an account.” The billing is the same. The tax treatment, for the patient, is now cleaner than it was 18 months ago.

The outbound employer sales effort becomes less critical when employees are arriving pre-equipped to pay for DPC through their benefit account.

The Compliance Piece

ICHRAs cover DPC fees only through funds used for IRS Section 213(d) qualified medical expenses. The DPC membership fee has to meet that definition, which the 2026 legislative changes clarified. If your practice charges within the $150/individual monthly cap, the fee qualifies under the current rules.

State law on physician dispensing remains a separate issue. DPC practices offering in-office medications should verify their state’s requirements regardless of how a patient funds their membership. DPC Frontier’s dispensing guide covers this by state.

What This Means

For employers, ICHRAs offer a real path out of managing group health without cutting benefits. The coverage stack of ICHRA stipend plus HSA-eligible marketplace plan plus DPC membership wasn’t cleanly available before this year. Now it is, and some benefits advisors are actively recommending it.

For DPC physicians already in practice, this is worth knowing when a new patient walks in with an unfamiliar explanation for how they’re paying. ICHRA-funded memberships work like any other. Understanding the mechanism helps you answer questions at the front desk without confusion.

For residents and physicians still deciding, the diversification of employer-driven DPC funding means the patient pipeline doesn’t depend on any single payer structure. Multiple mechanisms are now pointing employees toward DPC from the employer side. That’s a different market than the one that existed three years ago.