Does PostgreSQL support ICU collation's options and settings?
Case insensitive or accent-insensitive collations cannot be used prior to PostgreSQL 12, because internally PostgreSQL considers that strings with a different binary representation are not equal. When the collation-aware comparator says they are equal, it uses the non-collation-aware strcmp() function as a tie-breaker, to obtain what Unicode calls a "deterministic" comparison without normalization.

Starting with PostgreSQL 12, collations have a deterministic property, which must be set to false to benefit from equality of non-binary equal strings. From CREATE COLLATION:


  DETERMINISTIC
  
  Specifies whether the collation should use deterministic comparisons.
  The default is true. A deterministic comparison considers
  strings that are not byte-wise equal to be unequal even if they are
  considered logically equal by the comparison. PostgreSQL breaks ties
  using a byte-wise comparison. Comparison that is not deterministic can
  make the collation be, say, case- or accent-insensitive. For that, you
  need to choose an appropriate LC_COLLATE setting and set the collation
  to not deterministic here.
  
  Nondeterministic collations are only supported with the ICU provider.


The exact query in the question is not possible with nondeterministic collations because they don't support LIKE or any form of pattern matching (as of PostgreSQL 12).
Also the locale should have a -u- before the collation subtags, otherwise they're going to be silently ignored by the collator.

What does work as intended:

=# CREATE COLLATION special (
     provider = icu, locale = 'en-u-ks-level1', deterministic=false
   );

=# SELECT 'Å' = 'A' COLLATE "special";
 ?column? 
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 t