Helping Employer Clients Put Health Care Reimbursements to Work

What You Need to Know

You may still have clients who own businesses.
Other clients may hire nannies, home care workers or other domestic workers.
A client with an ICHRA program can let the employees do the shopping.

According to the KFF 2023 Employer Health Benefits Survey, 83% of firms with 10 to 199 employees offer health benefits to some of their workers, while only 42% of companies with three to nine workers do so.

The situation is even worse for nannies, home health aides and other domestic workers: In 2018, only 19% had employer-provided health insurance benefits, according to the Economic Policy Institute.

This significant gap in coverage has employers (and employees) searching for new options.

One solution that’s gaining traction today is the individual coverage healthcare reimbursement arrangement, or ICHRA.

This model allows employers to make tax-advantaged contributions to employees who enroll in a health plan through the individual marketplace.

Since first becoming available to employers in January 2020, ICHRAs have seen a surge in adoption among employers.

Employer ICHRA Perception Data

As ThinkAdvisor previously covered, ICHRAs have been gaining steam, particularly in states like New Jersey, where individual plan premiums match or are lower than small group plans.

Currently, ICHRA is more competitive on cost with small group plans in just over half of all U.S. states.

To better understand employers’ awareness, interest and concerns related to ICHRA, Gravie recently partnered with Wakefield Research to conduct a nationwide employer survey of 500 health benefits decision-makers who don’t currently offer ICHRA.

While the study showed favorable interest in ICHRA among employers, it also identified some barriers holding many back from offering this solution today.

Survey Details

Below are key findings that financial professionals can consider when helping clients navigate their health benefits expenses.

1. The ICHRA is projected to grow as a health benefits solution.

As many as 89% of benefits decision-makers are considering health benefits through an ICHRA for their employees in the next three years.

Furthermore, 87% agree that an ICHRA may be a strategic, long-term fit for giving their employees the flexibility to choose an individual health plan that works best for them.

With the expected increase in ICHRA enrollment through state marketplace offerings, financial professionals can help clients build a comprehensive benefits strategy that aligns with their financial plans.

At Gravie, we see clients of all sizes offering our ICHRA solution alongside our small group health plan.

For some clients, an ICHRA might be a short-term ramp to a group plan, while for others, this model offers a sustainable strategy for the future — and not just for small and midsize groups.