As US employers brace for the largest price hikes on employee health plans in 15 years, a growing number are opting out of group insurance altogether.

Instead of providing medical benefits directly, more than 20,000 companies entered Health Reimbursement Arrangements (HRA) in 2026. That’s an increase of 53% from last year, according to a new report by advocacy group the HRA Council.

Under the HRA model, companies give their employees a stipend to purchase health insurance for themselves and their dependents on the Affordable Care Act marketplace or another exchange. The growing popularity of HRAs has garnered comparisons with the transition from defined-benefit pensions to the 401(k) savings plan as corporate America’s default retirement option.

Like 401(k)s, HRAs shift more risk and responsibility for health care to individual employees. The plans available to workers can vary widely by where they live, with more than a dozen insurers offering plans in some counties and only one in others. Individual plans also often have higher deductibles than traditional employer-sponsored group plans and are accepted by smaller networks of doctors and hospitals, according to Georgetown University’s Center on Health Insurance Reforms. Premiums in the ACA market also rose about 20% last year after Congress declined to extend Covid-era cost subsidies.

Robin Paoli, the HRA Council’s executive director, called the reimbursement plans an “elegant” solution to growing frustration among workers over spiraling costs and coverage changes. Allowing each employee to purchase their own plan frees them to pick the most useful benefits and to stick with the same plan if they change jobs, Paoli said.

I’m needing assistance understanding what the advantage of a full-time job is that offers: insulting pay, zero job security, no raises, no room for advancement, no pension and no health insurance. That sounds like gig work with an unnecessary HR component.