What employers need to know about an ICHRA. With healthcare costs increasing and retention and recruitment efforts becoming more challenging, many employers are left wondering what cost-saving strategies they can adopt, without transferring the burden to employees. While traditional plans continue to work for some businesses, others find these plans don’t meet their employee's needs and continue to prove costly. As an employer, you have options.
An Individual Coverage Health Reimbursement Arrangement (ICHRA) is a type of health insurance reimbursement arrangement that gives employers an alternative option to a traditional plan. With an ICHRA, employers can reimburse their employees the cost of some, or all, of the premiums they pay on their own. Although certain criteria apply, this arrangement can be a great option for those employers who may be at risk of ACA non-compliance fines for large employers or those looking to satisfy a diverse population, such as a multigenerational workforce.
Allowing the flexibility of choice– for employers and employees.
ADDRESSING THE DEMANDS
Personalization and flexibility are key components in today's benefit programs and with a wide range of individual needs, employers may wonder how they can address these demands while staying within budget. An ICHRA could be the answer. Some benefits of an ICHRA include:
- An ICHRA can be offered by businesses of all sizes, giving a new level of flexibility to employers.
- Businesses can choose the level of contribution that suits them without any caps. Employers can contribute as much— or as little— as they want, giving another option to those employers who may not have been able to provide benefits due to cost.
- An ICHRA doesn’t have to be offered to the entire workforce. Employers have the choice of who they want to provide the arrangement to and how much each group, or class, will receive. Reimbursement amounts can vary between different classes but must be the same for those employees within the same class. For example, full-time vs part-time employees or seasonal vs temporary employees can have varying levels of contributions within the same business.
- Employees who are offered ICHRA can choose plans that fit their unique needs. Each employee comes with their own set of health requirements and the ability to choose what they need is both cost-effective for the business and goes a long way for recruitment and retention.
HOW TO QUALIFY FOR AN ICHRA
To qualify for an Individual Coverage Health Reimbursement Arrangement employees and their families must be enrolled in an individual health coverage plan, or Medicare, which must be verified annually. An ICHRA cannot be offered along with a traditional plan to employees in the same class, or group. Other guidelines and limitations do apply, such as HSA compatibility and FSA eligibility, therefore employers are encouraged to speak to a trusted advisor.
INDIVIDUALIZED APPROACH TO AN ICHRA
At Conner Insurance we take the time to discuss how an ICHRA can work for your business and answer any questions you may have. Training and educational services for HR staff and employees can help lessen any uncertainty employees may have when changes are made. When choosing an Individual Coverage Health Reimbursement Arrangement, you can be sure to receive guidance and support along the way.
Healthcare costs are skyrocketing and businesses are feeling the strain. Employers need a solution that combats high costs while remaining competitive within the industry. With an ICHRA, employers can choose the reimbursement amounts that suit their business and employees can choose the insurance they actually need.
CHAT WITH US
If you are interested in knowing what an ICHRA can do for your business, let’s chat.