Sure, we’ve been saying just how popular the Individual Coverage Health Reimbursement Arrangement is for some time now. And while many businesses see countless benefits and the increased popularity in ICHRA, the average business owner may not just yet. However, recently released analytics are suggesting there is significant growth across a variety of data points, confirming the ICHRA’s validity and viability as an employer-sponsored benefit program. Some of these increases are specifically being seen in state-based classes as companies expand. If you’ve been waiting on the proof in the pudding to convince you that the ICHRA solution is worth a look, this is the conversation you simply must read.
The Metrics Are In, and the News Is Good
Thousands of businesses, large and micro, have been jumping on the ICHRA bandwagon since its availability in 2020. It’s a unique platform that allows businesses to depart from the expensive, traditional group plans and find affordability and flexibility with the reimbursement model. Here are a few key metrics reports are sharing right now about just how revolutionary the ICHRA is.
The ICHRA Provides More
Some of the data reported includes the percentages of business allowances between ICHRA and Qualified Small Employer Health Reimbursement Arrangement platforms. The requirements tend to be stricter with the QSEHRA model. Employers with ICHRAs are offering more in allowances to their teams than QSEHRA.
Covering Monthly Premiums & Medical Expenses
Analytics also shed additional light on how employer-sponsored ICHRAs are covering far beyond the occasional out-of-pocket medical expense. In fact, 93 percent more is being offered in allowances, including monthly premiums, when compared to companies with premium-only accounts. When employees see reimbursements for monthly premiums and those direct medical expenses, it becomes a win-win for both company and participating staff.
Choosing to Expand Beyond the Premium-Plus
Because the experiences have been incredible, at the participant level, more companies have begun exploring expansions to include allowances beyond the premium-plus requirements. Reports suggest 58 percent of employers are choosing to expand beyond those premium accounts to also include other eligible medical expense reimbursements.
A Closer Look at Average Allowances
Considering percentages is one thing. But before you decide if the ICHRA solution is right for your company budget and staff, it might help to see actual numbers associated with various allowances. This can be helpful to analyze just how beneficial the reimbursement model is for employees. So, while there are cost-savings at the company level, you can know that your staff will be reaping the monetary benefits of the ICHRA, too.
Average Overall Allowances
Based on recently released studies, the average monthly employee allowance is $882.51, which represents a 5 percent increase from last year’s amount. Additionally impressive is the comparison between the average allowance with the cheapest Silver Plan on the ACA Marketplace. Those average monthly premiums are $436, meaning there is plenty of reserve leftover to also cover those anticipated out-of-pocket reimbursements.
The Average Allowances Between QSEHRA and ICHRA Models
There are annual allowance caps for companies implementing QSEHRA variations, and those figures come into play with this dataset comparison. When employers are limited on how much they can offer, the employees will naturally see fewer reimbursements. The monthly QSEHRA cap for single employees is set at $441.67, and those married or with dependents are capped at $861.67.
Comparatively, the single individual allowance for ICHRA participants, on average, is $1,072.74. Those who are single with dependents average $1,192.43, those who are married average $1,238.17, and those who are married with dependents average $1,393.35. That’s a substantial difference in benefits!
Family Status Allowance Averages
Some of these reports also dove deeper into the premium-only and premium-plus allowance figures. Single employee differences between PO and PP accounts are $699.69 and $1,352.95. Those who are single with dependents are $789.67 for POs and $1,575.77 for PPs. Married employee allowances are $803.92 with POs and $1,484.88. And married with children, team members would see $897.75 for POs and $1,766.41 with PPs. The advantages between the two account types are significant across the board.
The Increase in State-Based Classes
Companies are spreading out in terms of onboarding and remote working shifts. The data shows that as businesses increase their footprints, the need for a more conducive health insurance benefit solution becomes even more paramount. Here are some of the other class-related stats that might affect your decision.
The Most Popular Employee Classes
One of the most significant and most popular advantages of leveraging the ICHRA model is the sponsoring company’s ability to offer reimbursements to various employee classes. Many of these individuals, based on their employment types alone, would not be able to participate in the traditional group plans. Out of the eleven various classes on the eligibility list, the most popular types of employees receiving ICHRA benefits are full-time staff, full-time salaried employees, salaried team members, and part-time workers.
ICHRA Class Diversification Data
The recently shared analytics suggest that 72 percent of ICHRA participating employers choose to offer reimbursements for one primary employee class. Other percentages that demonstrate the need for a second or three-plus class types, are 19 percent, and nine percent, respectively. It indicates that this ICHRA benefit is certainly being leveraged and more individuals are able to participate.
State-Based Class Data
Many employers, especially those hiring remote workers, are also dividing teams into state-based classes. The state-based class feature is proving to be incredibly effective in this post-pandemic new normal. When compared with last year’s data, there is a five percent hike in the number of companies using state-based classes. That may not sound like a sizable or significant percentage at first, but it represents an expansion of 24 additional states from 2020.
If you’re ready to explore your company’s potential transition to an ICHRA, let the professionals at W3LL be your guide. These data points only provide the analysis behind the growing popularity among businesses and employees alike of the ICHRA model. And now may be a great time to make the change as we head into the last few months of the year.