When it comes to Individual Coverage Health Reimbursement Arrangements, also referred to as ICHRAs (ick-rahs,) businesses seem to know and welcome all of the various benefits. But from the employee perspective, the concept of a reimbursement model, and not the traditional group plan, will present more new questions.
Here are three of the most routinely asked of those employee questions answered. As an employee who may be considering participation in a company ICHRA, these are the directions you need right now. And for employers launching a new ICHRA, these are considerations you should take into account as you introduce the reimbursement model to your teams.
1. Will the ICHRA Save Me Money or Cost More?
One of the first and more pressing questions employees typically ask involves affordability. As with any significant change to benefits, people are first concerned with changes in costs. And they almost always ask if an ICHRA platform will save them money.
Saving in Monthly Premiums
Because an ICHRA requires employees to enroll in health insurance plans on their own, employees can leverage the many cost benefits of the ACA Marketplace. Monthly premiums are often reduced significantly with the help of eligible premium tax credits. And those costs are often less expensive than the former, employer-sponsored group plan that siphoned payment off of the employees’ paychecks.
Saving in Out-of-Pocket Expenses
Nearly every health insurance plan has an outline of what constitutes an out-of-pocket expense. For employees, those costs can often be reimbursed through the company’s ICHRA. These might include deductibles, prescription drug costs, and copays, as well, making the ICHRA 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 are guaranteed and free to the enrollee. This means that those employees can save potentially hundreds of dollars in leveraging these preventive care services.
2. How Do I Start with ICHRA Benefits?
When employees are presented with their employer’s ICHRA plan, they often are unsure about how to get started. One of the most commonly posed employee questions is for direction on what to do next. There are precise steps an employee can take to better understand his or her new benefits and follow through with health insurance enrollment.
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 participate 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
In response to the pandemic, 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 can guide their teams by explaining the availability of these premium tax credits and encouraging those participating in the ICHRA to apply.
Choosing a Health Insurance Plan
When employees are presented with an ICHRA reimbursement benefit, they must enroll in a health insurance plan to participate. They may not be familiar with where to go or how to get started, including those aforementioned tax subsidy applications. W3LL can be a trusted resource for anyone looking to explore the Marketplace for the first time. And with a few brief questions, premium tax credit eligibility and insurance plan enrollment is a breeze.
3. Will My Health Insurance Coverage Change?
Usually, employees want to know what changes of coverage they can expect with a transition to an ICHRA. They’re used to their old group plan. They will need to know what to expect from the ICHRA 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. Some employees may need specialist care or have doctors in a network not formerly covered by the old group plan. The Marketplace can put hundreds of plan options at their fingertips, 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. Plans are sorted into metal tiers, ranked by coverage and monthly premiums. Each employee can find his or her own health insurance plan that’s affordable, based on individual household incomes and budgets. And to help them understand their ICHRA benefits, companies should outline what qualifies as a reimbursable expense. For many employees, monthly premiums can be reimbursed, making finding a customized health insurance plan even more affordable.
The short answer is yes; each ICHRA participant can expect changes in health insurance coverage. And it’s a customizable shift that each employee can make themselves. Maybe one person needs lower monthly premiums and is relatively healthy. He can purchase a Bronze plan and submit for ICHRA reimbursements for any expenses that come up throughout the plan year. Another employee may need more robust healthcare, including treatments for chronic conditions and specialist providers. She can choose a Gold plan on the Marketplace that covers a higher percentage of those non-traditional costs and reimburse out-of-pocket expenses accordingly.
If you’re a business launching a new ICHRA and need help rolling out the plan to your employees, let the ICHRA experts at W3LL help! And if you’re an employee looking to explore the Marketplace for the first time, browse with W3LL. We can help both companies and employees leverage the countless benefits that come with an ICHRA.