Individual Coverage Health Reimbursement Arrangement (ICHRA) is still considered the new kid on the block after becoming a viable alternative to traditional group health insurance in January 2020. Often viewed as a super-charged version of the older Qualified Small Employer Health Reimbursement Arrangement (QSEHRA,) this model allows employers to offer tax-free health insurance reimbursements. 2021 saw a boom in ICHRAs popularity, and it seems like the advantages of this solution only seem to grow by the day. If you haven’t yet explored the many ICHRA benefits for your business and staff, 2021 is an excellent time to take a look.
1. Promise of Additional Savings for Employees and Employers
Employees utilizing an ICHRA can take advantage of new savings on the ACA Marketplace that came into effect during 2021. Effective March 11, 2021, the American Rescue Plan Act introduced a temporary expansion of the ACA. The premium tax credits previously available to qualifying individuals are receiving additional funding, making even more cost savings attainable for millions of eligible Americans. Qualifying Health Plans (QHPs) are available at a lower price than ever before, and individuals are encouraged to enroll or reassess their health plan options as higher quality health plans might be available at a lower price.
This measure alone is attracting existing and new individuals to the Marketplace, also enticing to the providers who offer plans there. The potential growth is unparalleled. Since ICHRA allows for the freedom for employees to join the ACA Marketplace and be reimbursed for the plan of their choice, these savings are now available for all employees who enroll through the Marketplace.
A Plan to Fit Any Budget
Employers have the freedom to adjust their reimbursement limit. Additionally, it is to the employer’s decision if unused funds roll over to next year’s insurance cycle or if they are returned to the company. This customization features allows for employers to choose the options that will help meet their budgeting goals. Since insurance premiums are lowering, employers can offer an adjusted reimbursement limit to account for these savings.
All in all, President Biden’s commitment to making healthcare more affordable and accessible make it a perfect time to get started with an ICHRA. Give employees the freedom to pick the health plans that meets their needs without being trapped in expensive one-size-fits-all traditional group health insurance plans.
2. Recent Legislation Places ICHRA in a Position of Growth
Legislation that supports ICHRA does not end with increased savings due to premium tax credits.
Long before President Biden took office, he was on the campaign trail promoting his agenda for reforming the ACA. His plan incorporates improvements that allow for a broader eligibility guideline, making the marketplace health insurance options available to more Americans. As the ACA continues to strengthen, so does the power of an ICHRA.
Expanded Enrollment Periods
Part of President Biden’s executive order also initiated a special enrollment period for all Americans. Usually reserved only for those experiencing a qualifying life event, the special enrollment period was open for those who may be experiencing hardships because of the pandemic. This presidential action inspired many states to issue special enrollment periods of their own. This brought added stability to the ACA as both new members and health plans flocked to the Marketplace to capitalize on recent and ongoing changes.
ICHRA Is Here to Stay
Considering these platforms continue to benefit employers large and small as a cost-effective method for employee health insurance, experts are predicting the ICHRA isn’t going anywhere. And since these HRA systems are designed to encourage employees to shop and buy insurance via the ACA marketplace and the state exchanges, they’re not expected to be targeted for changes.
3. ICHRA Provides a Way to Revamp Company Culture
Office life in 2021 is much different than it was three years ago. Gone are the days of isolated cubicles, lack-lusted company culture, and one-size-fits-all health benefits. For companies still online or those transitioning back to the office, there is the need to step up their employee benefits to retain and attract top talent.
An ICHRA offers a new and personalized way supply employee health insurance. Companies prioritizing innovation, personalization, and flexibility would benefit from switching over to an ICHRA to match their 2021 company culture rebranding.
One of the most evident and significant benefits of having an ICHRA for employees being it is inclusion of everyone. Employers can determine how your ICHRA will work but ultimately will be able to offer the reimbursements to full-time, part-time, seasonal, and even temporary workers. Traditional group plans would often only be available to full-time employees, leaving very few benefits options for the other integral members of your teams who are classified differently. Offering robust benefits to different classes of employees proves to be a game changing in this job market. Health insurance has a strong appeal to potential talent, and employers can set themselves apart by prioritizing the health of their employees.
The recent surge in energy and support for the ACA and the importance of a positive company culture in 2021 makes an ICHRA a must have. If you’re ready to explore your ICHRA options, contact W3LL! We can help you from inception to integration and beyond to ensure your business realizes the benefits countless other companies are already leveraging.