The tables have turned: HRAs are replacing group plans as a lead health insurance option

For eighty years, group health insurance was the default. It was the expected move for employers and the only real option for employees, so it went unquestioned. Premiums climbed, plans grew more confusing, and the model stayed the same anyway.

That is finally changing. Take Command's 2026 State of Employee Health Benefits Survey shows employers and employees converging on a better answer: give employers predictable costs, and give employees control. After decades of pulling in opposite directions, both sides are reaching for the same solution.

This is blog four of six in our series. Read the first three installments here:

1. The future of health benefits is choice

2. New data shows employees are at their health insurance breaking point

3. Group insurance is costing you more than you think

Talk to an expert

Download key survey findings

Employers and employees now want the same health insurance options

What makes the move toward HRAs so significant is that employers and employees are arriving at it together. Both sides are choosing the same direction at the same time, each for reasons of their own.

Employers have already started rewriting the playbook. The 2025 HRA Council Data Report found that:

• Large employer ICHRA adoption climbed 34% year over year

• 83% of small businesses turned to an HRA to offer health benefits for the very first

• The number of employees enrolling dependents in an HRA rose 37%

Numbers like that point to a market that is actively repositioning itself around employee choice.

Employees are pushing in that very same direction, and Take Command's 2026 State of Employee Health Benefits Survey makes their appetite hard to miss.

Nearly half of respondents, 49%, said that they would take their employer handing them money to choose their own plan, over a company plan. More than half believe employees should control their coverage, not employers.

What they are describing is a fundamentally different way of buying health insurance, one with the individual firmly in control of the choice.

Group insurance is failing the employees who want more choice

Group insurance is buckling for a straightforward reason: the bargain at its core has broken. The model promised employers predictable, discounted rates in exchange for pooling everyone onto a single plan, and for decades that worked. It doesn’t anymore.

A single high-cost claim can spike a smaller company's premium at its next renewal, and costs climb no matter how carefully the group is managed. Meanwhile, the coverage employees receive keeps shrinking against what they pay for it.

• The average employer family premium is closing in on $27,000 a year² and in our survey, 73.5% of employees watched their own insurance costs rise for 2026.

• Nearly eight in 10 expect another increase in 2027.

• Every renewal has become a guessing game, and the guesses keep landing higher.

The choice problem runs just as deep. A clear majority of employees want a real say in their coverage, yet 62% of employers still offer only one or two plans.

More than half of employees, 51.5%, told us they have stayed in a job mainly because they did not want to lose their insurance. Employees who stay for the coverage rather than the work tend to disengage. Employers end up paying to keep people who have quietly checked out, and those workers pass up roles that might suit them better. A benefit meant to attract talent ends up holding it in place.

How an HRA delivers real health insurance flexibility

An HRA fixes the central flaw in the group model by giving each side control of its own decision. The employer sets its health benefits allowance, and the employee decides how to spend it. Take Command's 2026 State of Employee Health Benefits Survey shows the people already on this model can spend less out of pocket and have more control over their care.

Real choice and flexibility: The employer sets a budget, and the employee chooses the plan that fits their doctors, their prescriptions, and their family. A group plan cannot match that health insurance flexibility because it has to work for everyone at once. An HRA replaces a short list of company plans with the full range of health insurance options on the individual market.

Lower out-of-pocket costs: When employees pick coverage built around their own needs, they stop paying for benefits they never use. The median out-of-pocket spend was $751 for employees with individual insurance, compared to $1,200 for those on a group plan. The plan that fits a person best is often the least expensive one as well.

Cost predictability for the business: The employer decides how much to contribute and whether that amount ever changes. That puts the budget back in the company's hands instead of the insurer's. Because the contribution is fixed in advance, a single high-cost claim no longer reshapes the renewal. Leadership knows what benefits will cost before the year even begins.

Coverage that travels: The employee owns the individual plan, so the coverage and the doctors stay with them when they change jobs. That portability matters more than ever, since workers now switch jobs every few years on average.³ At each move, the employee keeps the plan that already works and simply takes over the payments.

Health insurance education is what makes the money work

Many of the workers in our survey described real anxiety about understanding their plans, finding in-network doctors, and predicting what they would owe.

Take Command pairs every HRA with an in-house team that walks employees through their options, lines up plans against their doctors and prescriptions, and handles enrollment. 

Health insurance alternatives are already proving themselves

This is not a thought experiment, and it is not confined to one corner of the workforce. Take Command's 2026 State of Employee Health Benefits Survey covered ten industries, from education and healthcare to manufacturing, retail, and the skilled trades.

The same two signals appear in every one of them:

• Employees are worried about what they pay

• They want more control over what they get

Concern about rising costs heading into 2027 never drops below two-thirds in any industry, running from 68% in the skilled trades to 90% in education.

The appetite for a different model is just as broad. When asked whether they would rather take money from their employer and choose their own plan, support ranged from 36% in government to 66% in IT, with most industries clustering near or above the 49% overall figure.

No employer should assume their field is the exception, because the data does not show one.

The choice gap is real even where plans technically exist.

• In nonprofits, just 14% of employees feel they have plenty of choice in their coverage today.

• In government and the public sector, only 39% of employees on group plans say the same, even though almost half of their employers offer three or more plans.

More plans on a list is not the same as the right plan for a person, and employees clearly feel the difference.

The encouraging part is that the model already meeting this demand. Heading into 2026, 67.6% of individual-market employees saw their costs rise, compared to 76% of those on group plans. A larger share of individual-market employees also held steady, with 30% seeing no change at all against 23% on group plans. The skilled trades make the contrast vivid: 54.5% of individual-market workers saw no increase, while seven in 10 of their group-plan colleagues did.

Satisfaction tells the same story, and it holds across very different kinds of work. Overall, 34.5% of employees with individual insurance said they were very satisfied with the quality of their care, compared to 32% on group plans. The edge repeats industry by industry:

• 32% against 22% in education

• 44% against 37% in healthcare

• 36% against 29% in hospitality

• 33% against 27% in the skilled trades

• 54.5% against 45% in IT

These are very different workforces, and they land on the same result, which is that the people who chose their own plan are happier with the care it buys.

The most convincing evidence comes from the employees already living it day to day.

• In hospitality and tourism, where 45% of workers already buy on the individual market, well above the 22.4% across all industries, 86.7% said their plan lets them see the providers who matter to them.

• Across the full survey, the respondents who already use an HRA, about 9% of the total, tell the same story.

• All but one said their plan allows them to keep their preferred providers, and more than half have their entire premium covered by their employer.

• Retail shows how fast that appetite turns into action, with 57% of retail workers saying they should control their own coverage and the same share ready to take employer money and choose their own plan.

The takeaway is hard to avoid. This is not a fit for one industry while the rest wait their turn. In a classroom, a hospital, a warehouse, or a job site, employees are asking for the same thing, and the ones who already have it are better off for it. These are real workers using real health insurance alternatives, and the model is proving durable under their weight.

Download key survey findings

Brokers: from plan picker to strategic advisor

For brokers, this is the opening of the decade. Clients are done hunting for the least-bad renewal, and they want modern health insurance choices that solve the cost problem for the company and the control problem for the employee at the same time. 
The broker who walks in with that answer becomes the strategist a client trusts, and that is the relationship that earns the next renewal and the next referral.

Partnership program for brokers

The tables have turned

For years, what employers needed and what employees wanted sat on opposite sides of the table. The 2026 data closes that gap. Employers finally have a way to make their costs predictable, and employees finally have the control they have been asking for. HRAs give both at once, and a market adopting them at record speed has already cast its vote.

The question is no longer whether the shift is real. It is whether you want to lead it or catch up to it.

Ready to see what an HRA could do for your team? Talk to a Take Command expert and we will show you how.

References

1. HRA Council, 2025 HRA Council Data Report. https://www.hracouncil.org/report

2. KFF, 2025 Employer Health Benefits Survey. https://www.kff.org/health-costs/annual-family-premiums-for-employer-coverage-rise-6-in-2025-nearing-27000-with-workers-paying-6850-toward-premiums-out-of-their-paychecks/

3. U.S. Bureau of Labor Statistics, Employee Tenure Summary. https://www.bls.gov/news.release/tenure.nr0.htm