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ICHRAs and employer-sponsored healthcare

Informed Consulting partners with HealthSherpa to usher in this new take on employee benefit programs.

Whether you have 15 or 15,000 employees, employers have become handcuffed to the procurement and administration of employer-sponsored group benefits. Next to compensation, benefits are the indisputable second-most essential component of a desirable package for skilled workers. For business leaders, navigating this costly and complex space can feel like fishing for a humpback whale.

With challenges come opportunities and new entrants into the industry. Perhaps one of the most interesting developments since HSAs, 2020 introduced an intriguing option for employers – ICHRAs. Individual Contribution Health Reimbursement Accounts a.k.a. ICHRAs deliver all of the tax advantages of a traditional group health plan, plus loads of headache reduction potential. In a reimbursement-style model, employers issue essentially a stipend to be used to shop for individual health plans such as those available via the ACA Marketplace. Employers love the reduced administration while allowing employees more choices with a plan and carrier that best suits their needs.

Groups for whom an ICHRA could be appealing may include:

  • Multi-state teams

  • 15%+ group rate increases

  • Risk-averse employers

  • Employers with high administrative burden

  • < 100 employees

  • Employers in states with lower individual health plan costs

  • Employers that cannot meet standard group health plan participation requirements

Informed Consulting & HealthSherpa partner on ICHRA-centric strategy

ICHRAs are raising eyebrows in the industry but how do we go from concept to deployment? Unwinding the current mindset and infrastructure, and rebuilding a new one for all players in the ecosystem, can feel overwhelming.

In order for employers to utilize these plans, relationships between third parties, such as multi-state exchange enrollment companies and HRA vendors, must occur. Informed Consulting was asked by HealthSherpa to create these relationships to allow small employers to take advantage of ICHRA plans.

Lead Informed Consultant, Lynne Clark, helped to lay the framework for a successful strategy…

  • Identified and established partnerships with ICHRA Third Party Administrators and other stakeholders

  • Conducted ICHRA educational series for Agents and Brokers

  • Analyzed ICHRA Early Adopter Trends and Patterns

  • Contributed as a member to the HRA Council and the 2022 Growth Trends for ICHRA & QSEHRA Data

As a result of working with Informed Consulting, HealthSherpa saw results including:

  • ICHRA premium on HealthSherpa grew 5x from 2020 to 2021

  • 42 states with ICHRA enrolled employees

  • Over 20 partnerships formed

During this partnership, we had the opportunity to capture results for specific employers who redesigned their employee benefits program utilizing HealthSherpa’s ICHRA infrastructure.

Case Study 1: Mid-Market Employer | Plan Parity

A mid-market employer successfully launched an ICHRA to a state-based employee segment. The group used resources available through HealthSherpa’s ICHRA offering to determine their contribution strategy, educate employees and ultimately enroll them in a group-comparable plan in South Carolina’s individual marketplace.

Case Study 2: Small Employer | Cost Containment

This non-profit was able to successfully transition from a group health plan to an ICHRA-based employee benefits program by utilizing HealthSherpa’s offering. HealthSherpa’s consumer advocacy team was able to provide hands-on support and education to help employees as they selected their plans. Employees had more choices and the group was able to transfer their financial risk of managing a group plan to each individual enrollee.

The timing could not be better for a more consumeristic alternative to traditional group medical plans. COVID-deferred care and pandemic-related carrier expenses resulted in record breaking 2022 rate increases (28.2% across all coverage) leaving employers to either absorb the cost or pass it to their inflation-riddled staff. Combine these increases with a more thoughtful American public who, amidst lockdowns, have discovered convenient and cost-effective ways to tackle daily life – and you have a ready-made market for ICHRAs. HealthSherpa CEO, George Kalogeropoulos was quick to recognize the opportunity, “ICHRA is changing the dynamic of the relationship between employers and employees on the critical question of health insurance, and we’re thrilled to partner with ICHRA TPAs to help employers understand the benefits and communicate them with their employees.” By allowing employees to take a more active role in the selection and management of their medical coverage, they are also potentially inspired to take a more proactive role in managing their health and seeking cost-effective care options (ie. digital health providers). ICHRAs have the potential to relieve employers of financial risks and encourage consumer-led choices that result in better health outcomes.

To learn more about ICHRAs, check out some resources below:

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