Businesses are learning the benefits of Individual Coverage Health Reimbursement Arrangements (ICHRA) and are sharing those benefits with their employees. As employees learn about these new benefits, they’re in need of an ICHRA FAQ to understand how these changes will affect them.
W3LL highlighted the three questions employees should have answers to before signing up for their company ICHRA plan.
1. Will ICHRA Save Me Money?
ICHRA entered the scene recently and offers a new way to handle employee health benefits. Employers create and add funds to a health reimbursement account (HRA) and employees use these funds to cover insurance premiums and health care expenses.
Saving in Monthly Premiums
Under ICHRA, employees can be reimbursed for enrolling in one of the many health insurance plans on the ACA Marketplace. This allows employees to leverage the many cost savings of the ACA Marketplace, including use of eligible premium tax credits, significantly reducing monthly premiums.
Saving in Out-of-Pocket Expenses
Nearly every health insurance plan issues strict guidelines of what constitutes as an out-of-pocket expense. Care not typically covered under traditional group health plans will often be reimbursed through an ICHRA. The ICHRA model allows for pre-tax contributions to cover deductibles, prescription drug costs, and copays, making an ICHRA plan more cost-saving than a traditional group plan.
Saving in Preventive Care
Because employees can enroll in ACA health insurance plans, they’re also subject to ACA rules governing cost-controlling measures and essential health benefits. These essential health benefits include coverage of certain preventive care services that are guaranteed and free to the enrollee, potentially saving employees hundreds of dollars.
2. How Do I Set Up an ICHRA?
When employees receive their employer’s ICHRA plan, they often are unsure about how to get started. Employers can provide additional guidance and resources to employees, so employees will understand their new benefits and follow through with the ICHRA requirements and benefits.
Understand the Timelines
Employees should understand how much time they have to opt-in to an employer-sponsored ICHRA. Additionally, there are usually deadlines for those who want to enroll in a qualified health insurance plan on their own. Employers should be transparent and diligent about communicating these timelines to eligible employees so they can take the next steps in securing coverage.
Applying for Tax Subsidies
The ACA now has increased funding that applies directly to the available tax subsidies. For employees venturing into the Marketplace for the first time, they may not realize they have access to apply for these cost benefits. Companies should explain the availability of these premium tax credits and encourage those participating in the ICHRA to apply.
Choosing a Health Insurance Plan
One of the requirements for ICHRA is for employees to enroll in a health insurance plan to participate. Employees may not be familiar with where to go or how to get started, including those pesky tax subsidy applications. Healthcare.gov offers a great place to start learning about your eligible health plans. W3LL also provides resources to help you make the best choice when shopping for a new ACA plan.
3. Will My Health Insurance Coverage Change?
Employees want to know what coverage changes they can expect when switching to an ICHRA plan; they’re used to their old group plan. Employees will need to know what to expect from their ICHRA benefits and any new health insurance coverage options they have available to them.
Finding a Marketplace Plan They Need
In most cases, employees can find a better health insurance plan that fits their healthcare needs via the Marketplace. Instead of being forced into a company group plan with fixed expenses, limits, and provider restrictions, ICHRA participants can find coverage specific to their precise needs. The Marketplace has hundreds of plan options, allowing them to take control of enrolling in a best-fit plan.
Finding a Marketplace Plan They Can Afford
Instead of being forced into the old-fashioned group plan with costs they can’t control, employees participating in an ICHRA can explore the Marketplace to find plans they can afford. To help understand ICHRA reimbursements, companies should outline what qualifies as a reimbursable expense. For many employees, monthly premiums can be reimbursed, making a customized health insurance plan even more affordable.
Each ICHRA participant can expect changes in their health insurance coverage, but it’s a customizable shift that each employee can make themselves. One employee may be relatively healthy and looking for lower monthly premiums, while another may need more robust healthcare, including treatments for chronic conditions. The Marketplace offers plans that cover both needs and meets the budget of each employee.
If you’re a business launching a new ICHRA health insurance plan, the experts at W3LL can help! We know the ICHRA rules and regulations and can help you set up an ICHRA easily. Leverage the countless benefits that come with an Individual Coverage Health Reimbursement Arrangement today.