Back in 2020, the group health insurance market quietly underwent a transformation that, five years later, has everyone asking, “What is ICHRA?” If your clients haven't already asked you, they soon will.
ICHRA, or the Individual Coverage Health Reimbursement Arrangement, has gradually emerged as the revolutionary change group health coverage has needed for decades. Broadly, it opens up the ACA to employers and employees. For brokers, it represents an innovative and attractive solution that can help your current clients while also creating new opportunities to expand your book of business. So, what exactly does ACA for employers look like, and how can it benefit both you and your clients?
Let’s dive in.
How Does ACA for Employers Work?
Through the ACA, businesses are able provide tax-free reimbursements to employees for their health insurance premiums and qualified medical expenses. This modern approach to employee benefits moves away from the one-size-fits-all model of traditional group health plans, placing more choice and control in the hands of employees, while enabling employers to stabilize their healthcare costs.
Employers set a defined contribution for their employees. Employees are then free to use this allowance to shop for plans on the ACA. They can select from dozens of plans with a variety of networks and providers that align with their needs, schedules, neighborhoods, and more.
How Do You Get Clients Started?
Most brokers will partner with an ICHRA administrator. There are multiple platforms available to help you assess the HRA opportunity for your clients. In most cases, these platforms will act as your partner throughout the entire process – from identifying clients that may be a good fit to developing a strategy that meets the particular needs of employees.