Small Businesses Dominate New Individual Coverage HRA Sign-ups

Did you know that 78% of the companies that are signing up for a shiny new Individual Coverage HRA (Health Reimbursement Arrangement) are small businesses? Yeah, it’s true!

You might be thinking, what exactly is an Individual Coverage HRA? Well, let me break it down for you. It’s a cool way for employers to help their employees pay for their health insurance. The best part? It’s specifically designed for small businesses. So, if you’re one of those small businesses out there, this might be something worth considering.

Now, back to those sign-ups. It’s pretty impressive that so many small businesses are jumping on board with the Individual Coverage HRA. It’s like they’re saying, Hey, we care about our employees’ health and want to help them out!

But why are they choosing the Individual Coverage HRA? Well, one reason might be the flexibility it offers. With this plan, employees can choose their own health insurance coverage and get reimbursed for it. It’s like having the freedom to pick what works best for you and getting support from your employer. Not too shabby, right?

So, if you’re a small business owner, you might want to take a closer look at this Individual Coverage HRA thing. It could be a win-win situation for you and your employees. After all, who doesn’t want their team to be healthy and happy?

Remember, 78% of small businesses are already diving into this new opportunity. What are you waiting for? It’s time to make a smart move and give your employees the benefit they deserve. Your business will thank you later!

I wanted to share some interesting information about the Individual Coverage Health Reimbursement Arrangement (ICHRA) that I recently discovered. According to Take Command Health, it seems that small businesses have been quick to embrace this new employer-sponsored health insurance plan. In fact, a whopping 78% of the people enrolled in the plan are from small businesses just like yours and mine!

Let’s Look at Some Numbers

When it comes to the early adopters of the ICHRA plan, nonprofits and associations make up 20% of the group. Right behind them, we have professional organizations that include engineers and architects, making up 14% of the adopters. It’s great to see such a diverse range of industries getting on board. We also have tech companies at 11% and healthcare providers and services at 9%.

Let me tell you about the new health reimbursement plan. It’s a fancy plan that has some great advantages over the old-fashioned group plans that employers used to offer. You see, with this new plan, employers have more control over costs, which is definitely something they like. And guess what? Employees also benefit, because they get more options to choose from!

Now, let me explain how this new plan is different from the old group insurance model. In the past, employers could only offer one plan that was supposed to fit everyone. But let’s be real, we’re all different and have different needs. That meant employees didn’t really have many choices. Not cool, right?

But now, thanks to this new plan called ICHRA, things are changing. Over 200 companies have already signed up for it. And you know what? It’s been small businesses that have really taken the lead in embracing this new world of benefits. They’re the true pioneers, according to Jack Hooper, CEO and founder of Take Command Health. Pretty impressive, huh?

Expenses

Did you know that 61% of employers choose to reimburse their employees for medical expenses and premiums? It’s true! Some companies even go a step further and include medical expenses as part of their benefits packages. This is especially common among small businesses.

When it comes to the ICHRA applications, small business employers have the option to vary rates based on family status or contribute the same amount for all employees. Interestingly, though, many employers are not choosing to vary rates based on age.

Employers are getting creative with their benefits packages by customizing allowances to fit their budgets and the needs of their employees. They’re taking full advantage of the uncapped contribution, which means they can offer generous rates. Rates for a single employee can range from $400 to $1,200 per month. And if a package includes coverage for a whole family, the average rate is between $500 and $1,500.

If you have a business and you have at least one employee who receives a W-2 or a salary, you can offer them something called an ICHRA. But there’s a catch – in order for your employees to be a part of the ICHRA, they need to have their own individual health insurance. This means that if your employees are already covered under their spouse’s group health insurance plan, or if they’re part of a health care sharing program, or if they choose to go without insurance altogether, they won’t be able to participate in the ICHRA.

But here’s the good news – the ICHRA is open to a wide range of employees. Whether they’re full-time, part-time, seasonal, or hourly, it doesn’t matter. Even temporary employees who work for a staffing firm can join.

Recently, the most common factors considered when enrolling employees in the ICHRA have been whether they’re salaried or hourly, where they’re located geographically, and whether they’re full-time or part-time.

Here’s an interesting fact – the ICHRA is becoming really popular in states that have strong individual markets. Places like California, Texas, Florida, and Oregon have seen a surge in ICHRA adoption.

So, what exactly is ICHRA?

In June 2019, a new type of Health Reimbursement Arrangement (HRA) called ICHRA was established by the federal government. This expanded on the previous qualified small employer HRA (QSEHRA) by allowing businesses with 50 or fewer employees to reimburse their employees for medical expenses without providing group health insurance.

What’s different now is that ICHRA allows all businesses, regardless of their size, to reimburse their employees for their healthcare expenses. It also gives employees the freedom to choose a health insurance plan that suits them best and allows for the reimbursement of individual insurance premiums, which was not possible with traditional HRAs.

In essence, ICHRA is a health benefit provided by employers that is funded by them and is tax-free. Its purpose is to reimburse employees for their individual health insurance and other medical expenses. Instead of buying insurance for employees, it focuses on reimbursing them for the insurance they already have.

Let me break it down for you. ICHRA works in four simple stages. First, employers can create their own custom plan that suits their needs. Then, they decide which employees are eligible and set limits on reimbursements.

Now, here comes stage two. Employees get to choose the individual plan that works best for them. They have the freedom to pick what suits their needs and preferences. How cool is that?

Alright, now we’re onto stage three. Employees can submit claims for reimbursements. If they have a valid claim, they’ll get their money back. It’s like getting a refund, but for your healthcare expenses!

Last but not least, stage four. Once the claims are approved, reimbursements are made. That means the employees will get the money they’re owed.

Now, let’s talk about how small businesses benefit from ICHRA.

ICHRA is a game-changer for small businesses. It eliminates those pesky restrictions based on the size of the company so that even small businesses can provide health coverage for their employees. How awesome is that?

Not only that, but ICHRA also gives business owners more control over costs. They can choose plans that make financial sense for their company while still providing coverage for their employees. It’s a win-win situation!

With ICHRA, I can finally lighten the load on my employer when it comes to managing our health plan and the risks that come with it. It’s a relief to no longer have to worry about things like plan renewals, participation rates, which doctor networks employees prefer, or those dreaded annual premium increases. Now, it’s much simpler for my employer to decide which employees qualify, set their monthly allowances, and then focus on running the business. Meanwhile, us employees get the freedom to choose the health plans that suit our needs.

ICHRA offers my employer the flexibility of four different reimbursement structures to choose from. They can provide the same amount of reimbursement for everyone, or they can tailor it based on the size of our families or our ages. They even have the option to vary the reimbursement based on both family size and age. It’s great to have these options that can fit the needs of each employee.