How Chambers of Commerce & Nonprofits Can Help Small Businesses After Marketplace Tax Credits Were Reduced

For years, the Federal Health Insurance Marketplace helped offset rising premiums

through expanded tax credits. Many individuals — including small business owners and their employees — relied on those subsidies to make coverage affordable.

But as those enhanced tax credits have been reduced or eliminated, the financial impact didn’t disappear.

It shifted. And small businesses were the ones who took the hit.

The Reality: When Marketplace Credits Went Away, Costs Didn’t

When federal tax credits were scaled back, premiums didn’t suddenly drop to match. Instead:

• Employees saw higher monthly costs

• Owners faced pressure to “help out” financially

• Businesses struggled to recruit and retain talent

• Coverage decisions became reactive instead of strategic

Many small employers were left scrambling — especially those who had leaned on the individual marketplace as a workaround to offering group benefits.

(This is where cracks started to show.)

Why ICHRA Looked Like the Answer — But Often Isn’t

Individual Coverage HRAs (ICHRAs) were positioned as a flexible solution: employers could contribute a set dollar amount and let employees buy individual coverage on their own.

In theory, it sounded great.

In practice, many small businesses experienced:

• Employees losing or never qualifying for tax credits

• Wide cost differences between employees

• Confusion during open enrollment

• Increased employee dissatisfaction when plans didn’t meet expectations

Once marketplace subsidies shrank, ICHRA exposed a major flaw — employers were still financially exposed, just in a different way.

(ICHRA can work in specific scenarios, but it is not a universal fix.)

Small Businesses Were Left Holding the Bag

As costs increased, Without tax credits

• Employees expected employers to contribute more

• Employers wanted predictability but couldn’t find it

• Annual renewals felt more volatile than ever

Small businesses don’t have massive HR teams or unlimited budgets. When systems shift, they feel it first — and hardest.

That’s why many are now looking beyond the marketplace entirely.

A Smarter Path Forward: Association-Based Health Strategies

This is where chambers of commerce and nonprofit industry groups can step in with real solutions.

Association-based health strategies allow multiple small businesses to pool together under a shared structure, creating leverage that individual businesses simply don’t have on their own.

When done correctly, this approach can:

• Reduce dependence on unstable marketplace subsidies

• Create more predictable employer costs

• Offer better-designed plans than individual coverage

• Support long-term sustainability

This isn’t about replacing the marketplace — it’s about reducing reliance on it.

Why Chambers of Commerce Are in a Unique Position

Chambers already exist to support business growth, advocacy, and longevity.

Offering access to a pooled health strategy:

• Adds measurable value to membership

• Helps retain and attract members

• Addresses one of the biggest pain points businesses face today

For chambers, this isn’t just a benefit — it’s leadership.

Why Industry-Specific Nonprofits (Like Transportation & Logistics) Are Even Stronger

Industry groups often outperform general pools because their members share:

• Similar workforce demographics

• Comparable job risks

• Consistent coverage needs

For transportation and logistics groups, association strategies can be designed with:

• Accident and hospital coverage

• Disability protection

• Predictable budgeting for owner-operators and small fleets

This level of customization simply doesn’t exist on the federal marketplace.

The Role of the Exclusive Broker & Participation Agreement

For an association health strategy to work, it must be structured and protected.

That’s why these programs include a formal agreement that:

• Designates one broker as the exclusive servicing partner

• Requires participating businesses to purchase benefits through the program

• Establishes expectations for education, service, and ongoing support

This isn’t about limiting choice — it’s about maintaining consistency and accountability.

Pooling only works when everyone commits.

Important Clarification: Exclusive Broker ≠ Exclusive Carrier

A common misconception is that this type of agreement locks businesses into one insurance company.

It does not.

• The exclusivity applies to the broker, not the carrier

• The broker actively shops multiple carriers

• Plans are selected based on what best serves the association and its members

This structure ensures flexibility while still protecting the integrity of the pool.

(The broker works for the group — not the carrier.)

Why Participation Matters More Than Ever

As marketplace subsidies decline, fragmentation hurts everyone.

Association strategies thrive on:

• Participation

• Growth

• Shared responsibility

The larger and more stable the pool becomes, the better the outcomes for every business involved.

The Bottom Line

Marketplace tax credits were a temporary support system — not a permanent strategy.

As those credits fade, small businesses are being forced to rethink how they offer health insurance. ICHRA alone isn’t enough, and individual coverage is becoming increasingly unpredictable.

Association-based health strategies offer a smarter, more sustainable path forward — one built on structure, advocacy, and collaboration.

When businesses stop trying to solve this problem alone, real solutions become possible.

Interested in Exploring This for Your Organization?

If you’re part of a chamber of commerce, nonprofit association, or industry group — especially in a trade group — and want to explore a pooled health strategy that reduces reliance on the federal marketplace, the first step is education.

(Structure first. Strategy second.)

🔹 ICHRA vs Association Health Strategy

Frequently Asked Questions

What is ICHRA?

ICHRA (Individual Coverage HRA) allows an employer to give employees a set monthly allowance to purchase their own individual health insurance — usually through the Federal Marketplace.

Why did ICHRA become popular?

ICHRA gained traction when enhanced federal tax credits made individual plans more affordable. Employers liked the idea of:

• Fixed monthly costs

• Less administrative responsibility

• Shifting plan selection to employees

(The math worked better when subsidies were stronger.)

What changed?

As marketplace tax credits were reduced or eliminated:

• Employee premiums increased

• Fewer employees qualified for meaningful subsidies

• Employers felt pressure to increase allowances to stay competitive

The cost didn’t go away — it just moved.

Does ICHRA still make sense for some businesses?

Yes — in very specific situations.ICHRA can work when:

• Employees are spread across multiple states

• Workforce is highly variable

• Employer wants a short-term solution

(It is not ideal for stability, predictability, or retention-focused groups.)

How is an Association Health Strategy different?

Instead of sending employees to shop individually, association strategies:

• Pool businesses together

• Create collective buying power

• Reduce reliance on the Federal Marketplace

• Offer plans designed for the group, not the individual

This is proactive — not reactive.

Is this just a different version of group insurance?

Yes — but done smarter.

Association strategies often unlock:

• Better plan designs

• More predictable renewals

• Options not available to very small groups

• Long-term sustainability

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Does an association plan eliminate individual choice?

No.

Employees still choose from available plan options — but within a structured, supported system instead of navigating the marketplace alone.

Why does participation matter so much?

Pooling only works when participation is strong.

More participating businesses =

• Broader risk spread

• Better pricing stability

• More leverage at renewal

That’s why participation expectations are outlined upfront.

Is this a long-term solution?

Yes. Association strategies are built to outlast marketplace fluctuations, tax credit changes, and political shifts.

(That’s the point.)