Ocean City MD | Keen Insurance Associates

Individual Health Reimbursement Arrangements (ICHRA’s) Solutions

On October 12, 2017, an executive order to “promote healthcare choice and competition across the United States” and “prioritizing health reimbursement arrangments to expand employer’s ability to offer HRA’s to their employees.” Employers have started using ICHRA’s since January 1, 2020.

How does this change the employer benefit buying process?

Our experience in offering both group health insurance and individual products does not change the decision-making process.

  1. Compare your current group health plan to plans available in the individual market. Note covered essential health benefits in the individual market are the same as the group market for employers with 1-50 employees as mandated by the patient protection and Affordable Care Act. Typical savings are 10-40% for comparable plans.
  2. Determine your employer’s contribution for the new plans offered.
  3. Give your employees information regarding the new plans available to them, allowing them the choice of bronze, silver, gold, or even platinum plans.
  4. Give the employees the tools to determine the best plan for their specific needs to facilitate plan selection.
  5. To maintain the tax advantages of group plans of 100% deductibility of premiums for employers, which are tax-free to employees, and allow 100% deductibility of employee contributions via payroll deduction.
  6. Receive a bill for the first month’s premiums based on employee’s plan selection and enrollment of dependents.
  7. Upon payment of the first month’s premium, employees can access virtual ID cards from the carrier website and actual ID cards are mailed to employees.
  8. Receive a monthly bill for ongoing premium payments, adjusted for new hires and terminated employees.

The new regulations, if implemented correctly, can result in a seamless experience for employers and employees and significantly lower premiums.