Growing companies across all types of industries are realizing there are new options for providing health benefits to employees these days. And one of those cost-effective and flexible solutions is the Individual Coverage Health Reimbursement Arrangement (ICHRA). Rebounding from the effects of the pandemic has driven business owners to focus harder on the bottom-line costs of coverage options and employee benefits. The traditional group plans can be costly, and in some cases, nearly impossible for companies to afford.
The ICHRA option offers incredible cost control, huge flexibility for employees and continues to grow in popularity. It’s customizable, making it a perfect fit for any company benefit budget. And the ICHRA allows participating employees to enroll in their chosen ACA health insurance plans, making the ICHRA a welcomed addition to the company benefit structure. But one of the most significant and highly valued benefits of the ICHRA is its ability to be paired with other types of health benefits or coverage options. Today, we’ll highlight three coverage platforms that work in conjunction with an ICHRA, just adding to the flexible capabilities.
1. ICHRAs Can Work in Conjunction with Group Plans
Employers with at least one W2 employee can take advantage of an ICHRA offering. And various business entities, including traditional for-profits, non-profits, government, and religious organizations, can qualify. The ICHRA can be a stand-alone offering for all, or it can be segmented based on employee type, which is ideal for those businesses that employ more than just a full-time bench of traditional staff. And as long as you offer the ICHRA reimbursement model to the same groups of employees, you are compliant.
When it comes to a group health insurance plan, companies can offer those in conjunction with an ICHRA under one condition. The group plan can only be available to those not leveraging the ICHRA. So, both can present great options for a company that may want to offer the group plan to full-time staff and the ICHRA for seasonal or part-time employees, for example. The same group of employees cannot have access to both types of benefit plans. Still, when offered together for different staff members, it translates to incredibly flexible opportunities for companies.
The ICHRA model is often attractive to companies because of the flexibility for varying types of employee participation. It allows for a more diverse offering, capable of providing benefits to anyone who may be working for your business. Full-time salaried employees qualify, as do to hourly staff. But other employee types that normally don’t qualify for the traditional group health plan have options under the ICHRA, including part-time workers, seasonal workers, and even temporary staff. Knowing your company can offer both a group plan and an ICHRA, as long as both are not available to the same employees, can mean offering reimbursement options to those who otherwise wouldn’t qualify for the group plan.
2. ICHRAs and Medicare Reimbursements
The ICHRA model allows businesses to set up a structure for reimbursements based on eligible medical or health-related expenses. Budgets can be allocated per employee and administered with a customized proof of expense procedure. With more and more Americans working beyond the age of 65, companies have Medicare-eligible team members these days, too. And the ICHRA can help those employees, as well.
Medicare isn’t just available for people turning 65. Some younger individuals who possess certain disabilities also qualify for the range of benefits, including those who have been diagnosed with a form of End Stage Renal Disease or kidney conditions requiring dialysis or transplants. In these scenarios, individuals can qualify for Medicare benefits, still, be productive members of your company. And now, these groups can take advantage of your ICHRA platform, too.
Your company might employ individuals who qualify for Medicare or Medicare supplemental health insurance, including Parts A, B, C, D, and Medigap. Should you opt to set up an ICHRA, those Medicare-eligible employees may qualify for potential reimbursement of those premiums and costs under the ICHRA platform. And because the ICHRA is a reimbursement model, any out-of-pocket costs for prescriptions or procedures may also be eligible for refunds.
3. ICHRAs and COBRA
An ICHRA is also subject to consolidated Omnibus Budget Reconciliation Act (COBRA) reimbursements. Under COBRA coverage, any worker who perhaps loses health benefits can elect to remain on a company-sponsored plan for a limited period of time. This applies to any employee whose employment is terminated, either voluntarily or involuntarily. And it’s no secret that paying for traditional group plan COBRA coverage out-of-pocket can be a significant burden to those who need it.
When an ICHRA participating employee chooses COBRA coverage, the ICHRA reimbursement will be allowed and funded at the full amount. As an example, if there is an employee allowance of $400 under the ICHRA plan, the employee can continue to receive that full amount for reimbursements. However, there may be a premium fee required to essentially unlock the benefit.
Having an ICHRA platform can improve how eligible individuals can use COBRA when necessary. And it may soften the hardship financially, improving the plan effects for those using it. It’s an added layer of coverage protection that may be more helpful for those losing their jobs, with an ICHRA reimbursement option to back it.
Small and giant businesses alike continue to look for new ways to offer relevant health benefits without tanking the bottom line. And many are finding the “Goldilocks” value of an ICHRA. Knowing how flexible the platform can be for controlling costs and personalizing options may drive you to explore your ICHRA plan options. But also learning just how compatible the ICHRA model can be with other types of coverage is a significant reason to take a look, too.
W3ll specializes in helping companies like yours leverage the countless benefits ICHRAs have to offer, including setup, retention, ACA compliance, and participation metrics. Contact our professionals today to talk about implementing an ICHRA, either as a stand-alone benefit or in conjunction with other potential qualified coverages that apply to your teams.