If you are working in healthcare, you may have heard about some alternative models in health insurance design. One of these being, an Individual Coverage Health Reimbursement Arrangement, or an ICHRA for short. So, what is it and why should you care?
Well, if you are an employer of any size, small to large, you need to consider this as a cost-saving solution. ICHRA’s are a type of employer-sponsored plan that allows employers to contribute a specified amount per eligible employee for premiums or eligible medical expenses. This replaces the one-size fits all traditional group coverage model by giving your employees the flexibility to enroll in their plan of choice while you as the employer reimburse them for it.
Instead of complicated plan design options, rate increases and let’s not forget, the fiduciary responsibility of the employer’s health benefits administrators, there is a solution that minimizes or even eliminates all of that. If this hasn’t sparked your attention yet, let me give you 3 reasons why you should explore this option:
1. Meet the Needs of Your Employees.
Your employees want choice! 63%[1] of employees say that flexible benefits make them feel more empowered, increase productivity and make them more likely to stay with a company. With Millennials now the largest segment of the workforce, employees are starting to question what they are actually getting for how much they pay for their health benefits.
2. Lower Your Costs.
This is a no-brainer; everyone wants to lower their costs. We have the age-old problem in healthcare where we keep paying more and we get less. This is true when it comes to health services, quality outcomes, health insurance premiums and everything in between. By transitioning to an ICHRA, you have control over your costs, so you manage to a predictable budget.
3. Limit Your Financial Liability.
If you’ve been following the news, this is the latest class action lawsuit against an employer. The claims are regarding the failure to negotiate reasonable and affordable drug prices on behalf of their employees, breaching its financial obligations under the Employee Retirement Income Security Act (ERISA). With an ICHRA, you offload a large part of that financial liability by not sponsoring a single plan and instead, letting the employees select an ACA accredited plan on the Marketplace.
If you are a small employer, you are not excluded from this and in fact, I can guarantee if you are offering health coverage that this is a better option for you. The basic functionality is all the same, it’s just under a different name: Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).
If this is you and you are just interested in learning more about the models and if this is right for you, give us a call or send us an email today. We would love to help you lower your healthcare costs and simplify your plan design.
Get in Touch: info@nulight-consulting.com
[1] Forbes. (February 2022). Flexibility is the Most Empowering Benefit for Employees.
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