What 2021 SEP Numbers Tell Us About the Future of ICHRA

The 2021 Marketplace Special Enrollment Period (SEP) provided Americans the opportunity to enroll in coverage through the ACA Marketplace; many struggled with the COVID-19 pandemic and needed new and cheaper health coverage. Stretching from February 15th to June 30th, 2021, the SEP saw a dramatic increase in enrollees. Usually reserved for people with qualifying life events, the 2021 SEP acts as a safety net that allows for health coverage in the middle of life-altering events.

Over 1.5 million signed up for new health coverage during this period. 2021 saw a dramatic increase in enrollment compared to the same periods in 2020 and 2019 when 625,000 and 443,000 consumers enrolled in Marketplace coverage, respectively.

New Legislation Helps Revive the Marketplace

In addition to the increased need in comprehensive health coverage due to COVID-19, other factors contributed to the success of the 2021 SEP.

Cost Savings Attract New and Returning Members

The American Rescue Plan Act (ARP) increased the premium tax credits (APTC) available to qualifying individuals, effectively lowering the cost of Marketplace plans. The ARP made health plans more affordable and reduced costs for returning members. New and returning members were encouraged to shop for a new high-quality plan that did not break the bank. The 2021 SEP saw the average monthly premium after APTC drop by 25%.

In addition to the 1.5 million that enrolled in coverage through the Marketplace for the first time, 2.5 million returning members switched coverage to capitalize on newfound savings. Returning members reduced their monthly premiums by an average of 40%.

Support from Higher Up

The Biden-Harris Administration has been vocal in its support of the ACA Marketplace. President Biden promises to enhance the Marketplace, essentially transforming Obamacare into what they’re now calling Bidencare 2.0. In a nutshell, Biden’s plan incorporates improvements that allow for a broader eligibility guideline, making the marketplace health insurance options available to more Americans. Implementing the ARP and SEP were two monumental steps already taken to improve the viability and stability of the Marketplace. Numerous additional legislations have also passed to less of a public applaud. For example, annual increases to hospitals under Medicare saw reductions.

It is safe to say that revitalizing the ACA Marketplace will continue to be a priority of the Biden Administration.

Providers Rejoining the Marketplace

Presidential support, increased enrollees, and additional overall stability are attracting a wide variety of health plans to, or back to, the ACA Marketplace. Health insurance providers have joined the Marketplace to offer health plans at a growing rate over the last three years. The Kaiser Family Foundation (KFF) shared an additional 30 insurers jumped in across 20 different states already this year. Another 61 health insurance companies have expanded their service regions to grow their footprint of available plans. And while the trends suggest even more are flooding into the ACA market, there is already an average of five insurance providers per state, from which individuals can choose.

W3LL expects that the increase in health plans and enrollees will continue to have a positive effect on one another and drive both to new heights. As more plans become available, more enrollees will flock to the Marketplace and vice versa.

All This Growth Will Have a Positive Effect on ICHRA

With the increased popularity of the Individual Coverage Health Reimbursement Arrangement (ICHRA) among American businesses, there has certainly been an influx of Marketplace applicants.

Throughout the various conversations and details regarding President Biden’s plans for the ACA, the ICHRA and other HRA variations have not been addressed specifically; however, employees utilizing an ICHRA are encouraged to shop and enroll in an ICHRA through the ACA Marketplace.

Increased stability, lower prices, and more choices could be the motivation individuals need to enroll in an ICHRA and get coverage through the ACA Marketplace. Prices for more traditional means of employer-health insurance continue to rise, making the lowered prices of the Marketplace plans more and more attractive. As the ACA Marketplace continues to expand and improve, more employers and employees will consider an ICHRA due to its several advantages.

If you still haven’t explored your ICHRA options, contact W3LL! We can walk you through the countless benefits already available to businesses like yours. It’s become a popular strategy for many companies and may be the ideal solution for you and your employees.