Individual Coverage Health Reimbursement Arrangements (ICHRAs) continue to be the popular way forward for countless businesses looking to explore more affordable employee benefits options. But the success of an ICHRA is directly linked to the strength and stability of the Affordable Care Act and its Marketplace.
While opinions of the ACA in Washington still vary, the Biden Administration is charging forward with renewed support for the platform. Partially driven by the increased need for affordable health insurance and the pandemic, a series of executive orders and pending legislation are positioned to strengthen the ACA accessibility, eligibility, and flexibility. And that only spells good news for ICHRAs.
Added Stability for the ACA
The ACA may have been on shaky ground during the Trump presidency. Republicans sought to strike down the federally backed health insurance Marketplace, citing constitutional concerns. And another lawsuit landed in the Supreme Court, initiated by individuals and several U.S. states seeking to effect changes. But when the White House residency shifted, and President Biden took office, one of his first orders of business was to enhance and improve the ACA. In the wake of the pandemic, millions of Americans faced health insurance affordability challenges. Biden made it clear that the ACA would be the lifeline those Americans needed.
Enrollment Period Extension
While executive orders aren’t actually policies, they do call on the various federal agencies to explore and implement new policies based on their initiatives. President Biden issued one such executive order in January, launching a mass Special Enrollment Period for all Americans. Healthcare.gov reopened, outside of its normal enrollment periods, from February through May of this year, allowing Americans to find affordable health insurance.
The Centers for Medicare and Medicaid Services (CMS) and the Treasury Department proposed a Rule on June 28th intending to expand access to health coverage through the ACA Marketplaces. This Rule included the proposal to permanently extend the open enrollment period. The newly suggested open enrollment period for the upcoming benefit year would span from November 1st, 2021 to January 15th, 2022. This would extend open enrollment permanently to lengths similar to those during the COVID-19 pandemic and the early years of the ACA, giving members another month to enroll compared to the 2019 open enrollment period.
Additionally, the same Rule proposed a monthly special enrollment period (SEP) where members with a household income at or under the 150% of the federal poverty level (FPL) can enroll in a platinum-like silver plan with minimal cost-sharing requirements during monthly periods.
A Call for More Permanent Policy
The Biden administration called on the various federal agencies to revisit the ACA guidelines to address a few key issues, and many were brought on by COVID-19. The executive order called attention to existing policies that would complicate eligibility requirements for people with pre-existing conditions, especially COVID-related conditions. It brought to light policies responsible for undermining Medicaid and the ACA accessibility. And any policies that made enrollment more difficult, more expensive, or unattainable would need to be assessed.
Recent Supreme Court Ruling
The ACA survived its third challenge in the Supreme Court recently, by a seven to two vote. Attempts in Congress to unwind the health care law have continued to fail, and many say this latest Supreme Court ruling may put the challenges to rest. And considering just how many Americans rely on the Marketplace right now, which is 31 million according to the latest analytics from the Department of Health and Human Services, dismantling the ACA would be catastrophic.
The American Families Plan
In March, the Biden administration’s COVID relief bill invested $1.9 trillion into a wide range of areas, including the ACA. Premium tax subsidies through the Marketplace got a surge in funding, making monthly premiums even more affordable to enrolling Americans. Even those individuals and families who already had coverage from the Marketplace were able to revisit the exchange and re-apply for newly available tax subsidies, including those participating in an employer-sponsored ICHRA.
Two Years of Subsidies
The American Families Plan took things a step further by seeking to extend the temporary financial boost to a more permanent solution. The plan in its temporary timeline will lower the cost of health insurance premium averages by roughly $50. If these savings become permanent beyond the two-year executive order, nine million Americans stand to save hundreds each year on monthly premiums. And an additional four million uninsured Americans will finally have health insurance coverage.
Millions Losing Their Jobs
Because of these latest funding initiatives, and due to the growing need at the individual level, the ACA is proving to be a lifeline for many for the first time. When Americans began losing their jobs, they also lost their employer-sponsored group health plans. And it forced millions to explore options elsewhere. More participants in the exchanges will only drive better plans and more affordable options.
The Latest Proposed Rule
On June 28th, the Treasury Department, along with the Centers for Medicare and Medicaid Services, proposed a rule that would enhance and stabilize the ACA even further. This proposed rule would undo Trump-issued regulations. It would also provide insights for the agencies to further explore accessibility policies.
ACA Strength Is Good for ICHRAs
ICHRAs offer flexibility and control for companies that are desperate to manage costs and rebound after the pandemic. And the employees are embracing the ICHRA model, too. Putting the health insurance decision back in the hands of the individuals and facilitating reimbursements for out-of-pocket costs is equally popular among employees. Added support and more robust availability of the ACA would only strengthen those with ICHRAs in place.
ICHRAs Are Just Good Business
If you have been unsure about exploring your ICHRA options for your staff, these latest headlines about the enhancement of the ACA should put any hesitation to rest. Instead of paying expensive group plan rates, businesses can design and customize a reimbursement policy that fits the budget. Employers can offer benefits to different employee classes that allow individuals to find their best-fit coverage options via the ACA. Employers are finding the ICHRA model is just good business with increased risk control and spending flexibility.
Subsidies Are Good for Employers and Employees
The surge in spending and investment into the ACA means greater savings. For those with an ICHRA, that means those cost savings are good for the employee as well as the reimbursing employer. As the platform continues to receive support, companies know that any additional premium tax credits available to individuals can translate to even more affordable ICHRA budgets.
Another Reason to Adopt an ICHRA for Your Business
The latest proposed rule represents yet another reason to consider implementing an ICHRA with your company. Despite past uncertainties, the ACA continues to prove to be the affordable health insurance ecosystem Americans need. Tapping into those savings will help you provide the best options for your staff and maintain your bottom line.
If you need additional assistance exploring your ICHRA options, let W3LL help! We can help you with everything from setup to retention and maintenance. Contact us and start leveraging the ICHRA benefits today!