Georgia-based employee benefits consultancy HRASimple has launched a web-based platform providing Individual Coverage Health Reimbursement Arrangements (ICHRA) to employers, offering an alternative and flexible employee benefits solution that is tailored to the unique needs of employees and their families.
In a traditional employee benefits setup, an employer buys a group health insurance plan that is shared by all their employees. In an ICHRA, employers allocate money for their employees, and the employees can go buy their own health insurance and pick the one that's best for their budget and their family structure. It allows employers to provide defined, non-taxed reimbursements to employees for qualified medical expenses, including monthly premiums and out-of-pocket costs, like copayments and deductibles.
In 2016, the 21st Century Cures Act enabled employers to offer HRAs to their workforce to help
cover the cost of medical expenses, but it was limited to very small businesses. In 2020, the US Federal Government expanded it to employers of all sizes. Since the expansion, HRASimple was one of the first companies in the US to administer an ICHRA for an employer with over 2,000 employees, resulting in significant savings for the employer in the midst of the COVID pandemic.
According to HRASimple’s Director of Business Development Todd Trainer, ICHRAs are an excellent alternative for certain businesses in order to address the ever-rising cost of providing health care to their employees. HRASimple engages with employers to determine whether an ICHRA is a good fit for their organization, exploring the various pros and cons. Once a contract has been signed, HRASimple will design, execute, and administer a plan that will best meet the client's needs.
Under an ICHRA, each employee will have the power to choose from a wide variety of health insurance plans, each with different features suited for a particular family situation. Some health plans are more suited for single persons, while some are targeted at married couples or families with children.
Trainer says that companies which are suitable for ICHRAs can save between 10% and 20% in employee health care costs, as employees are part of the larger, general public risk pool, rather than the company's headcount, where a single major event, such as a heart attack or premature birth, can have a huge impact on the company's premium upon renewal.
“With the constantly rising cost of health care, employers are dreading benefits renewal season, because it heralds another increase in costs, and they have to communicate that to their employees, who won't be happy about it, because they will be paying more, either in cost or in deductible. But with an ICHRA, each employee can go out into the marketplace and buy the health insurance that suits them the most. From just one or two options previously, they now have 50 to 60 options, and we can guide them in choosing the best one for them. We want to return providing health insurance for employees back to being a true benefit, and not a hassle for everyone involved,” Trainer says.
Media contact:
Name: Todd Trainer
Email: ttrainer@hrasimple.com
Published by: Omar Hamdi