The number of Americans eligible for Medicare continues to grow alongside companies adopting Individual Coverage Health Reimbursement Arrangements (ICHRA). The flexibility and cohesion of both provisions is creating a dynamic environment in which individuals and families are finding their perfect blend of coverage options and affordability. Here’s how it all works and what you need to know.
Growing Pools of Medicare Eligible Candidates
There continue to be growing pools of Medicare-eligible candidates year over year. Between 2019 and 2020 alone, the total of Medicare Advantage beneficiaries grew by roughly 2.1 million. And the Centers for Medicare and Medicaid Services reported 13.8 million Americans either signed up or auto re-enrolled through the marketplaces for 2022 coverage. Medicare Advantage plans provide those additional layers of services, including nurse hotlines, vision, dental, wellness programs, and disease management extras. There are a few notable contributors to these surges in Medicare eligibility.
An Aging Population
The senior population continues to grow and age into Medicare coverage. Sources project that over the next 40 years alone, the number of Americans hitting 65 or older will be a whopping 80 million. And the number of individuals who are 85 and older, typically representing those who require the most healthcare services, will almost quadruple by 2040.
The Pandemic Effects on Individual Health
The pandemic has affected Medicare numbers, as well. There were temporary privileges offered to impacted Americans and continue to be available on a provisional basis. There continue to be special enrollment periods in place for many Americans still facing health and financial challenges associated with COVID-19. Many of these individuals might not otherwise be eligible to enroll.
Growing Adoption of ICHRA Among Businesses
The ICHRA model of health insurance benefits continues to be popular among companies of all sizes, but especially small and medium-sized businesses. Faced with skyrocketing premiums from traditional group health insurance plans, businesses continue to turn to the affordable, flexible, and functional ICHRA reimbursement for their employees. Forbes reports the cost of average family premiums increased a massive 55% since 2010, and so have rising benefits costs. The affordability factor alone has forced countless companies to eliminate or reduce what they can offer. That is until ICHRA took hold.
Affordability in Providing Benefits
The ICHRA model’s affordability can help leaders establish the reimbursement parameters for their specific offerings based on benefits budgets. This allows companies to maintain compliance while offering reimbursements for employees to select the health plans they find most valuable and affordable to them.
Flexibility in Providing Benefits
Companies have other advantages with the ICHRA offering, in addition to the increased affordability. Benefits programs can dictate what out-of-pocket expenses are eligible for reimbursement, including monthly premiums, prescription care, dental, and vision. And ICHRA can be offered in tandem with a traditional group health plan for larger entities, so long as the pools of participants remain separate in eligibility. Also, companies can extend the reimbursements to employees who are part-time, seasonal, and even temporary, where traditional plans would not otherwise be available.
How Medicare and ICHRA Can Complement Each Other to Benefit Everyone
With growing Medicare beneficiaries and surging ICHRAs among companies, many individuals are looking to leverage both. So, how does an ICHRA work with Medicare? And can ICHRAs pay for health-related expenses for Medicare participants? What most companies and individuals need to know is just how well these two programs can complement each other in providing additional options and opportunities for broader health and wellness provisions.
Individual Benefits
An ICHRA can be used to help with reimbursement of Medicare premiums and Medigap. Other costs can also be eligible for reimbursement, making Medicare even more affordable for beneficiaries. And because the aging workforce continues to grow, ICHRA provides an added layer of affordability for those who work beyond the retirement age.
Company Benefits
Companies are enjoying the affordability and flexibility that comes with ICHRAs. But they’re also able to provide Medicare-eligible employees with benefits that traditional group plans don’t typically cover. And having the choice and control to determine what expenses qualify as reimbursements means companies can customize benefits according to their workforce makeup.
If you’re looking to explore an ICHRA model for your employees, let W3LL be your guide on how to setup, implement=, and manage your benefit. Contact our team to learn more about how ICHRAs complement Medicare coverage, and how to improve the health insurance benefits across companies and individuals alike.
Pete English
With nearly two decades in health insurance, Pete English’s diverse experience makes him uniquely qualified to help health plans and brokers leverage innovative technology in partnership with W3LL. From growing sales staff by 126% over 4 years at a large health plan, to building his own health insurance brokerage firm with over $7.2MM in annualized premium, Pete has done it all.
