The number of
While employers generally have been reluctant to embrace this emerging model, ICHRA adoption is accelerating as they search for
Her company's dataset provides a rare look at how more than 41,000 employees enrolled in ICHRAs actually behave when given plan choice. Even in markets where individual premiums have increased, enrollees are often reducing their overall healthcare exposure by
Thompson says convincing employers to adopt an ICHRA is a much easier conversation for her to have than with brokers. That's largely because of their mounting frustration over compounding increases in traditional group health insurance and in-network doctor churn.
"The broker will counter-sell against an employer's excitement over ICHRA, telling them the nine reasons why it's not going to work," she observes.
To raise their comfort level with ICHRAs, Thompson suggests they review the administrator's fiduciary status, licenses they hold with carriers, who picks up the phone and the agent of record that is going to service the policy.
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Assessing early adopters
Groups facing massive renewals on their group health plan that are at least north of 25% are first in line when it comes to considering an ICHRA, according to Nick Bellanca, a vice president and market leader at Lockton. "Obviously, that's driving the conversation," he says, also noting an uptick in interest from groups with lower paid and a higher variable hour workforce.
Another eager candidate involves private equity backed organizations that are now paying close attention to the enormous impact their healthcare spend is having on their bottom line. "They love the idea of having something predictable and consistent from a contribution perspective," he adds.
They follow the healthcare industry, a high utilizer of care, as early adopters of ICHRAs, Thompson explains. Since these organizations had already narrowed their network options to either a hospital location or direct primary care clinic to contain costs, it made sense to embrace this model.
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Other early adopters included the technology, professional services and hospitality sectors of the economy, according to Thompson, who says several national restaurant groups are now offering ICHRAs to part-timers to better compete for talent.
Given that ICHRAs represent a significant departure from traditional group health insurance, benefit brokers and advisers need to double down on communications. The most successful cases with the least amount of friction involve a white-glove approach applied on top of the technology, Bellanca suggests.
But it's not easily obtained. He says many of the market's fast-growing ICHRA platforms would rather rely on AI than invest in the necessary infrastructure to provide one-to-one support. "For something that's for some people very consequential, having another human walk you through it has proven to be the best practice so far," he adds.
Thompson says an employer has to care about the change-management component tied to bringing their group to an ICHRA and also prioritizing human touch over the use of software or technology. "We steward the entire time," she adds.
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Benefitbay is able to save employers 23% on average year-over-year with an ICHRA compared with their prior group year, "and that's with their admin fees." It may be as much as 36% if they absorbed that current year's projected increase.
While multiple HR leaders whose organizations Bellanca helped with their ICHRA rollout were very anxious about an employee backlash, several told him how pleasantly surprised they were that the change actually was well-received. "There's less noise than what you'd expect," he reports.
The key to a successful ICHRA implementation is ensuring that employees understand the rationale behind this change and decide on the right coverage option, Bellance believes. "Depending upon the platform you go with, they all offer different flavors of support," he says. "Some of it is more self-service, some of it is more chatbot and some do actually provide one-to-one support."
One of the biggest challenges consultants and producers face is being more open-minded about suggesting an ICHRA for their clients, he says. "I think a lot of people have a bias against ICHRAs because they're different and don't work the same way that our traditional, employer-sponsored health plan ecosystem has worked," he says.
