America's Benefit Specialist December 2022

ICHRAs

“Many employers find themselves in the middle of a perfect storm,” said Lindsay Hunter, senior director of health and bene fits at Willis Towers Watson. “Inflation and rising healthcare costs, ongoing emotional and physical wellbeing needs, and attraction and retention challenges caused by a tight labor market are driving employers to care fully evaluate their benefit programs and strategies. In particular, they are looking for ways to make healthcare more affordable for themselves and their employees.” FENDING OFF THE GREAT RESIGNATION The Great Resignation is putting pressure on companies. It’s forcing them to rethink their healthcare benefits and look at ways to at tract new employees and keep existing ones. In fact, 90% of human resources executives from the Quest Diagnostics Report believe they will have to improve benefit packages and increase wages during the next year. “In a time when skilled talent is [leaving] organizations at a rapid pace, managing benefit cost for both the employer and their employees is paramount,” added Hunter. But these HR executives are running into a technical challenge: More than three-quarters (77%) say they want to lower healthcare benefit costs for their employees, but don’t have the tools to do so . INNOVATING WITH ICHRAs So what can a broker do? How can you help current and prospective clients navigate today’s benefits landscape and reduce the associated costs? Innovate by introducing ICHRAs to clients. Effective January 1, 2020, an Individual Coverage Health Reimbursement Arrange ment is a group health benefit based on a pre-determined contribution that gives individuals choice and employers flexibility. By offering an ICHRA, businesses of any size can contribute a pre-determined, pre tax allowance to employees, who then have

ket, the flexibility and versatility of ICHRAs can help you remain relevant and respon sive to your clients’ top concerns today. MORE FLEXIBILITY AND FREEDOM ICHRAs deliver more control to employ ees, too: Once the employer has defined its pre-determined contribution to each employee (or class of employees), employ ees are free to use those funds to shop the individual marketplace and select the policy that best fits their needs. For many modern workers, access to a di verse marketplace is an incredibly attractive alternative to the constraints of limited, one size-fits-all group health plans. By offering ICHRAs to clients, you can help businesses attract and retain workers by meeting their growing demands for more personalized, budget-conscious healthcare benefits. The future of health benefits isn’t dan gling on the horizon—it’s already here, thanks to the rollout of ICHRAs. And the brokers willing to innovate and embrace the change today will become the industry’s leaders of tomorrow. 1 www.wtwco.com/en-US/News/2022/04/ employers-to-tackle-employee-health care-affordability-amid-rising-costs 2 https://images.wellness.questdiagnostics. com/Web/QuestDiagnosticsServices/%7B c25112a7-f4a9-40c7-b03f-db34fc3a ea73%7D_2022_Health_At_Work_Sur vey_Report.pdf 3 https://www.bls.gov/jlt/ 4 https://hrexecutive.com/time-for-employ ers-to-take-action-on-soaring-healthcare costs/

the freedom to use those funds toward an individual insurance policy of their choice. For many businesses, an ICHRA can provide a welcome alternative to traditional group health benefits, representing a big shift in the way health insurance is delivered. THE SMARTER, SIMPLER SOLUTION Unfortunately, while admirable in theory, the standard approach to ICHRAs can be very complicated for brokers (as well as their cli ents) to quote, administer and manage. Be tween the time-consuming administration, too many plan options and cumbersome reimbursement process, standard ICHRAs can be downright intimidating for brokers. The good news is that ICHRAs don’t have to be complicated. Brokers should look for ICHRAs that make it easy for everyone with online, all-in-one solutions that are intelligently designed to simplify the entire experience. This includes platforms that al low brokers to generate lightning-fast quotes based on multi-carrier plan comparisons that support employer contribution design, to employee enrollment assistance and mon itoring functionality, to seamless premium payment processing. Finding an end-to-end benefits solution can also lift the administra tive burden for brokers and their clients by eliminating recurring tasks and simplifying the process of managing group benefits. GREATER CONTROL AND ACCESS With ICHRAs, brokers can solve one of their clients’ biggest stressors today: soaring, shifting healthcare benefits costs. ICHRAs put employers back in control, allowing them to confidently set their health plan budget by setting a predictable, pre-deter mined contribution for each employee. ICHRAs also enable employers to group employees into different eligible classes, allowing them to further tailor and expand coverage options to their increasingly di verse workforce—including part-time work ers and those who may work out of state. For brokers whose clients are struggling to stay competitive amid a tight labor mar

John Kelly’s singular passion is to finally and permanently fix the entire health benefit experience— bringing it into the 21st Century and leading it beyond as the industry

evolves. Prior to his work at Nexben, John was founder and CEO of the BrocorXchange. He earned his BA at the College of Charleston in South Carolina.

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