Benefitfocus Announces Plan to Support Implementation of ICHRA for Employers, Medical Carriers
Under new rules released by the Departments of Labor,
"Used properly, ICHRA-funded medical coverage provides employers a new and unique opportunity to offer health benefits at a predictable cost, with minimal administrative overhead. As an additional reward, this could have a significant positive impact on recruitment and retention of top talent," said
- Providing solutions and capabilities for all carrier market segments, including group, individual, and state
- Supporting employer enrollment and administrative services
- Integrating the broker, carrier, employer, and consumer roles into its solutions
- Assisting migration of a consumer from one market segment to another
- Enlisting artificial intelligence (AI) to provide the informed decision support for consumers to make appropriate decisions for their families both now and in the future
- Allowing consumers to supplement a benefit with affordable and diverse voluntary products.
What is ICHRA?
The stated goal of ICHRAs is to promote employee and employer flexibility. Employers will provide healthcare benefits to their workforce, but in ways that reduce costs. Because the reimbursements provided to employees do not count toward the employees' taxable wages, ICHRAs extend basically the same tax advantage as traditional group health plans.
Employees will have the ability to choose a benefits plan that specifically meets their needs, receive reimbursement for their medical care expenses (and sometimes those of family members) up to a maximum dollar amount that the employer makes available each year. The employer can allow unused amounts in any year to roll over from year to year.
The federal government projects that it will take employers up to five years to adjust to the new rules, but they then anticipate greater adoption of ICHRAs as compared to previous HRAs. The government estimates approximately 800,000 employers will offer ICHRAs to pay for insurance for more than 11 million employees and family members, following the full phase-in of the program.
What ICHRA means to employers
Employers of all sizes will have additional flexibility in providing a "total compensation" package to their employees. But these planning opportunities will present challenges: the need to oversee both group plans and ICHRAs, integrate ICHRAs into the various chosen classes of workers, track employer contributions and employee activity, and administer the process.
What ICHRA means to carriers
Carriers will now be asked to navigate different paths with their employer customers, who may choose to make ICHRAs available to some employees, while maintaining group plans for others.
Helping the consumer navigate to the optimal individual medical plan heightens the adoption of the ICHRA approach by the employee. In an effort to support our carrier partners in their strategic initiatives to maintain a member for life, once an employee adopts the ICHRA and enrolls in an individual policy, the platform also facilitates the portable nature of the product by allowing the member to have access to their carrier and their plan through the same platform, even in the event of a change their employer or employment status.
"ICHRA is just part of a variety of options carriers will have to incorporate into their portfolio as they give consumers access to the benefits they need to improve their lives, no matter how they work, where they work, or if they work at all," August added. "Carriers and employers need one solution to meet these diverse needs and we are uniquely positioned to serve them."
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Actual results or performance might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: risks related to changing healthcare and other applicable regulations; the need to innovate and provide useful products and services; the immature and volatile nature of the market for our products and services; privacy; security and other risks associated with our business; our ability to compete effectively; management of growth; our ability to maintain our culture and recruit and retain qualified personnel; and the other risk factors set forth from time to time in our
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