One lesson of the pandemic is that employees want more control over the features and cost of their health insurance.
This is the principle behind the individual coverage health reimbursement arrangement, or ICHRA.
Employers are quickly embracing the option, with a 219% increase in the number of organizations that signed up to offer an ICHRA in the second half of 2020 compared to the first half of the year, according to new data from PeopleKeep.
Employer mandate compliance. Employers can use the ICHRA to satisfy the employer mandate of the ACA.
Employer cost control. Employers define a fixed budget, or an allowance, that works for the business without worrying about carrier-driven annual rate increases. There are no caps on allowances, so employers can offer as much as they want.
No minimum contribution requirements. Employers can choose the allowance amount that works within their budget without being told they have to contribute a minimum percentage of each employee’s premium.
Employee classes. Employers can offer a health benefit to a subset of their employees and offer employees different allowance amounts based on 11 different employment criteria. No participation requirements. Employers don’t have to pressure employees to participate in the benefit just so they will meet the plan’s participation requirements.
Employee choice and portability. Employees gain access to many more plan options by shopping on the individual market and buying their own plans, making them fully portable regardless of their employment status.
Click HERE to read full article by Alan Goforth, BenefitsPRO, May 17, 2021.