3 Reasons Why Employer-Sponsored Plans are On Their Way Out

Some trends just don’t have staying power. And when you’re talking about the puffy shoulder pads and parachute pants from the 80s, it’s probably best we said goodbye. But once-popular trends cycling out of the limelight to make room for more innovative and just plain better methods is pretty normal. In business, you’ve likely noticed just how quickly new ways of doing things become the norm. And do you know what else is on its way out, like pagers and bell-bottoms? The employer-sponsored, traditional health plans are taking the back-burner to better, more affordable, and flexible health insurance options. Yes, the expensive group coverage is losing ground and may not sound like a good fit for your company anymore, either. There are three primary reasons for it that we’ll highlight today.

1. Traditional Employer-Sponsored Plans Are Expensive

In years past, the employer-sponsored group plans made the most sense. A business could partner with a health insurance provider to offer coverage for employees, who would ultimately share costs of participation. But fast-forward to today’s economic and pandemic-affected climate, and those group plans are proving to be too expensive for everyone.

For Your Business

The health insurance industry is trying to quickly adapt to the new healthcare dynamics resulting from the global pandemic. Health conditions, long-term health issues, and increased costs associated with the pandemic are driving some of the group health plan prices through the roof. If your business was also affected by government-imposed shutdowns, or you experienced losses in revenue, those employer-sponsored plans are just too burdensome to afford.

For Your Employees

If you had to shutter your business, your employees likely also felt the financial crunches at home. Enrolling in one of those more expensive traditional group health plans may prove to be too expensive for your employees to contribute to, as well. And many employees are desperate to take home as much of their paychecks as possible these days. Enrolling in an expensive group plan that no one can afford at the employee level will only be a waste of benefits resources.

Less of a Value Proposition

Group plans typically enforce coverage guidelines that include in-network vs. out-of-network provider coverage, copays, and coinsurance benchmarks. Having strict rules about when, how, and where employees seek healthcare services is losing ground as a value proposition. They’re especially tough to swallow when they’re expensive.

2. The Employee-Driven Market Is Demanding Better

It’s an applicant’s market right now as thousands of businesses are desperate to fill critical roles. It’s this demand for workers that is also driving changes in how employers provide benefits and coverage options for their teams. The market is demanding a better way to engage, support, and accommodate employees.

Better Company Culture

Company culture matters, meaning employees will make career decisions based on what a business does for its staff, its community, and its customers. Any business not embracing a more conducive culture for change, engagement, and acceptance will soon fall behind in attracting top talent. How companies offer health insurance benefits matters, too.

Better Benefits Options

Employees today want customized options with everything. The old days of forcing a round workforce into a square health insurance plan are dissipating. It may even be a disadvantage since workers are demanding better and more affordable options for securing coverages.

Better Flexibility & Value

From curbside pickup options to telehealth services, the pandemic has driven the consumers’ need for flexibility and value in every service they need. At the employer level, those same flexibilities and increased value need to be paramount and at the forefront of making health insurance-related decisions. The expensive employer-sponsored plans are no longer the valuable option moving forward.

3. The ICHRA Is Just Too Perfect to Pass Up

The traditional group plans are phasing out of the limelight in part due to the surge in support for the Individual Coverage Health Reimbursement Arrangement. The ICHRA is the solution that solves the flexibility problems, the affordability challenges, and the market demand dynamics perfectly. It’s too ideal of a platform to not consider.

Flexibility for Employers and Staff

The ICHRA isn’t like the employer-sponsored plans of yesterday. Companies have the control and flexibility to establish the ICHRA platform within customized affordability parameters. The company owns the ICHRA and can establish the rules for reimbursements. These determined reimbursements are then managed by the employer to accommodate whatever health plans the participating employees choose to adopt, allowing for control and flexibility at the employee level, as well.

Allows Employees to Control Their Plans

Employees of all types, including part-time, seasonal, and temporary, can all control what kind of health insurance coverage they need individually. They can then submit for reimbursements through the company ICHRA based on exact out-of-pocket expenses, including monthly premiums, prescriptions, and copays. Browsing the ACA Marketplace, especially with today’s premium tax credits available, means employees participating in the company ICHRA can control their health insurance costs based on their unique household thresholds too.

Incredible Value for Everyone

Being able to set up benefits platforms that make sense to the company budget and still offer better coverage options for the employees is incredibly valuable. For staff members who can essentially customize their health coverage options individually and be reimbursed for out-of-pocket expenses is far more valuable than those old-school group plans. It demonstrates that the ICHRA is primed to meet the needs of both employers and employees in a new way that traditional group plans never could.

The days of the one-size-fits-all, employer-sponsored health plan are over. Today’s businesses are finding better value and affordability with the ICHRA. And it’s an advantage yours may not be able to pass up without consideration. When you’re ready to explore how the ICHRA model can work for your bottom line and your employees, let W3LL help! From reviewing your company dynamics to setting up the employee-facing dashboard to manage the flow of reimbursements, W3LL’s ICHRA support team can ensure you squeeze every last valuable benefit out of your ICHRA platform. Now, getting rid of those shoulder pads from the 80s, that’s entirely up to you.