During a recent webinar hosted by Employee Benefit News and sponsored by Ambetter Health and Zorro, industry experts discussed how Individual Coverage Health Reimbursement Arrangements (ICHRAs) bring cost stability to employers while giving employees more choice often at a lower cost.
The following five takeaways from the conversation can help you understand how ICHRAs impact the overall benefits landscape and how to successfully transition to an ICHRA.
1. Technology and AI Tools (And People) Power Smarter, Easier ICHRAs
Technology can significantly reduce ICHRA implementation and onboarding friction by powering better reporting and seamless integration between ICHRA platforms and payroll systems. AI-driven decision-support tools help employees choose the plans that best meet their needs and allow employers to model different reimbursements and explore various scenarios.
But even with advanced tools, working with a trusted strategic advisor is essential. ICHRA regulations are not yet fully codified, and staying up to date with regulatory changes and premium tax credit updates can be challenging. Advisors and brokers can also help navigate individual marketplace nuances, including expanded HSA eligibility for bronze and catastrophic plans.
Carriers also play a critical role in ICHRA success. For example, Ambetter Health offers "white glove" support for ICHRA members via a dedicated 1-800 line as well as an in-house team to assist brokers and administrators.
2. Communicate Early and Often
Implementing an ICHRA fundamentally represents a significant culture change for an organization. It is crucial to prepare both leadership and employees for this shift, as a simple announcement via email just before the transition will likely lead to a challenging experience. Early education and proactive addressing of any fears or preconceived notions are essential for a smoother onboarding and implementation process.
For instance, employees may worry that individual plans aren't as robust as group plans. Employers may be concerned that choosing from so many health plans could overwhelm employees. Employers may also fear offering ICHRAs will negatively impact recruiting—even though ICHRAs are rapidly gaining traction.
HR teams may also experience culture change since they are no longer responsible for selecting a single group plan or setting deductibles and co-pays. Instead, HR teams must shift their focus from directing benefits to empowering employees to understand and navigate their individual options.
3. Understand What Impacts Cost Savings
According to Danielle Winiecki, Director of Business Development, Ambetter Health Solutions, Centene's off-exchange ICHRA offering, individual market premiums can often be more competitive than group premiums, with regulation contributing to their stability.
ICHRAs often provide significant value for companies facing challenging renewal increases, those with cost-sensitive employees, or organizations experiencing high turnover and seeking alternatives to traditional plans. Organizations with a mix of salaried and hourly workers, or with employees spread across multiple states, also tend to benefit the most from ICHRAs.
4. Use Classes to Help Control Costs and Expand Coverage
ICHRA offers 11 employee classes—including full-time, part-time, salaried, hourly, and geographic location—that allow employers to vary reimbursement amounts across groups. When used strategically, these classes can help control costs while improving coverage.
For instance, if employees are spread across multiple states, employers can use the geographic location class to adjust reimbursement levels and give workers in higher-cost markets equal buying power.
Employers can also use classes to pair ICHRAs with traditional group health plans. For example, an employer could offer a group plan to headquarters-based employees while providing remote workers with an ICHRA.
5. Off-Exchange Plans Are an Option
Carriers like Ambetter Health are increasingly designing targeted off-exchange plans for ICHRAs that include options covering out-of-state employees. Ambetter Health is also adopting successful features from group plans to enhance its individual market plans, explains Winiecki.*
Most employees enrolled in an ICHRA choose an off-exchange plan, preferring the employer reimbursement over tax credits.
Strategy, communication, and technology tools drive ICHRA success. But it's also critical to partner with the right ICHRA benefits platform, a trusted broker or advisor, and leverage carrier insight and knowledge about ICHRAs.
*This content is for informational purposes only and does not constitute legal or tax advice. Availability of Ambetter Health ICHRA-compatible plans may vary by state and is subject to regulatory approval. Employees offered an ICHRA may not be eligible for premium tax credits through the Marketplace.
