Claim: Employees in an ICHRA plan would no longer receive quality group health coverage. Instead, they would be given a stipend and forced to find coverage on the Obamacare exchanges. Health insurance on the exchanges covers less and is more expensive.
Fact: Federal rules require that individual market coverage is comprehensive and meets ten specific areas of essential health benefits.
ICHRAs and QSEHRAs are voluntary options that permit employers to reimburse premiums for ACA-compliant individual market coverage that employees select. Suppose a traditional group health plan (the employer selects the coverage for their employees) is working well. In that case, there is nothing about the ICHRA rule that makes any changes to those arrangements. Individual market plans will be more attractive to certain employees since premiums are lower in many areas of the country.
With a traditional group health plan, the employer selects a limited number of coverage options for their employees to consider. In 2020, 74% of firms offering health insurance only provided employees with one type of health plan. The HRA rule has the potential to increase worker choice and control over their health insurance significantly. Economic research shows that employees value health coverage choices. A 2013 study in the American Economic Journal estimated that the median welfare gain of additional insurance options for employees equaled 13% of premiums.