When it comes to selecting a health insurance benefit option for your employees, you’ll apply the same level of due diligence and care as any other business decision. Finding the option with the flexibility to meet both business and employee needs can be difficult. Luckily, W3LL is here to help!
The Individual Coverage Health Reimbursement Arrangement (ICHRA) looks like the most viable option for most businesses. But before you officially decide to transition your company coverage model, you want to make sure your decision makes the most sense to your employees and your bottom line.
There are self-insured plans, fully-funded plans, and Qualified Small Enterprise Health Reimbursement Arrangements to consider, too. What you need is a side-by-side comparison to see how the ICHRA stacks up when compared to these other popular company health provisions.
The ICHRA Overview
Thousands of businesses are already making the transition to the ICHRA model for a number of reasons. Employees embrace the ICHRA platform because they control their health insurance decisions by selecting ACA Marketplace plans to best suit their needs. And employers love reimbursing exact medical expenses and not lofty premiums for unwanted coverage options.
If you’re still not 100% convinced that the ICHRA is the best solution for your company, let’s start with what you know.
ICHRA offers:
- Controlled costs in customized budget-setting for reimbursements
- Available solutions everywhere
- Reimbursement platforms to businesses of any size and across various employee types
- Reimbursements for medical expenses
- A maximum contribution-free solution
- An ideal solution for small businesses
Now, let’s compare these same benchmark metrics for the other available health insurance options. And in the end, you’ll be more comfortable with whatever platform you choose.
ICHRAs vs. the Self-Insured Plans
This type of insurance is often provided by an employer who collects premiums from employees and assumes responsibility for paying medical claims. A self-funded, often also called a self-insured plan, is one in which the company assumes the financial risk of paying health care benefits to its workers. A self-insured employer generally establishes a separate trust account of funds to hold money (both corporate and employee contributions) allocated to pay incurred claims. With an employee roster of relatively healthy workers, you might presume this is the most cost-effective method. However, health conditions are entirely unpredictable, and remember; there’s still a pandemic out there.
Here are the key metrics to consider when comparing to an ICHRA solution.
Costs: Expenses are uncertain and unpredictable, based on the health conditions of employees.
Availability: These self-insured plans are available everywhere.
Size Requirements: These self-insured plans are available to companies of any size.
Medical Expenses: Because employers assume the financial risks directly, medical expenses are N/A.
Maximum Contribution: There are no maximum contribution requirements for self-insured plans.
Small Group Fit: Self-insured plans are a risky method for small business businesses but are more suited for larger entities.
ICHRAs vs. the QSEHRA
The QSEHRA allows small employers to reimburse certain healthcare expenditures, such as health insurance premiums and coinsurance, to workers who have qualifying minimum essential coverage, including an individual Marketplace plan. These plans can be similar to the ICHRA model, albeit with a few IRS-defined restrictions to note, including annual contribution caps and employee-type specific guidelines. For many businesses, even the smallest companies with only a few employees, the ICHRA provides more flexibility and budget-friendly opportunities than the QSEHRA.
Here are the key metrics when comparing the ICHRA to the QSEHRA.
Costs: Costs can be somewhat controlled in a QSEHRA.
Availability: QSEHRAs are available everywhere.
Size Requirements: QSEHRAs are only available to companies with fewer than 50 employees.
Medical Expenses: Medical expenses are reimbursed.
Maximum Contribution: There are maximum contribution requirements for QSEHRAs.
Small Group Fit: QSEHRAs are a better small business solution than the traditional group plan but not as ideal as the ICHRA.
ICHRAs vs. Fully-Funded Plans
Because fully-funded health plans are handled and administered by insurance carriers, submitting claims and medical data takes a little more time and effort. A fully funded health plan is one that is provided by your employer. Your firm pays a premium to the insurance carrier in these plans. Every month, you’ll get a discount on your premium rate if you have at least one of your workers enrolled in the plan. In these scenarios, you might be passing the torch of administrative burdens to the provider, but you’re also responsible for choosing a provider with a plan that best suits everyone on your employee roster. And that may be hard to do considering the individual care and affordability needs of your staff.
Here are the data points to consider when comparing the fully funded plan with an ICHRA model.
Costs: Fully-funded plans are typically the most expensive route for health insurance.
Availability: Fully-funded plans are available everywhere.
Size Requirements: There are no size requirements for fully-funded plans.
Medical Expenses: Medical expense costs are not applicable under the fully-funded plans.
Maximum Contribution: There are no maximum contribution requirements for fully-funded plans.
Small Group Fit: Like the self-insured plans, the fully-funded plans tend to make the most sense for larger businesses but can still be more costly than an ICHRA.
If you have additional ICHRA comparison questions, you can always trust the answers of a trusted W3LL professional. We can help you sift through the metrics and make the final decisions about which health insurance model makes the most sense right now for your teams and company bottom-line. And should you decide to move forward with an ICHRA model, W3LL can guide you through the setup, launch, and ongoing reimbursement management tasks, too. From internal staff communication to medical expense submissions and reimbursements, W3LL can help squeeze every last benefit of an ICHRA platform.
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.
(631) 681-4898
PEnglish@w3ll.com
