Many employers are at a loss about how to reduce
Meet individual coverage health reimbursement arrangements, or ICHRAs, a model in which employers reimburse employees for some or all of the premiums employees pay for the health plan they buy on their own. According to the HRA Council, the adoption of ICHRAs grew by 29% in the last year, with
Under SureCo, every employee can theoretically buy their own plan directly from insurance carriers, while the employer agrees to help pay for a certain portion of the plan cost; SureCo would also help with enrollment and benefits management. Notably, this model places more responsibility on the employee to research and choose the right health plan — but Erik Wissig, the chief operating officer at SureCo, doesn't necessarily think that's a bad thing.
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"Carriers have been working with companies to accommodate broad groups," he says. "Allowing employees to shop and directly select plans created for individuals allows them to identify what fits them the best."
This means employees would be choosing from over 5,000 plans from 140 different carriers. While SureCo does help employees narrow down what would fit their health and circumstances, employers would need to ensure employees have the tools and time to actively engage in enrollment. They aren't just picking from two or three plans, and if done right, that will be a strength, not a weakness, says Wissig.
Robert Horry, chief impact officer at SureCo and seven-time NBA champion, knows first-hand that passivity gets you nowhere in the U.S. healthcare system. His eldest daughter, who was born with a rare genetic disorder, spent years in and out of the hospital before passing away in 2011 at just 17 years old. Horry recalls the countless phone calls and circular conversations with insurance companies as he tried to pinpoint what his plan covered. He stresses that it's worth deep-diving into healthcare research and doing the work it takes to choose from a plethora of options.
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"You really need a strong will to get what you want from your insurance," says Horry. "And you need to know exactly what your insurance provides."
That approach has worked for at least some employers: SureCo has saved its clients up to $1 million in premiums and increased employee plan participation by as high as 60%, according to its case studies. Wissig notes that under ICHRAs, it's harder for carriers to pin companies down with large premium increases.
"Premium pricing is based on the employee group itself and the claims they incurred, so pricing can dramatically vary year to year," says Wissig. "By moving away from the group model, it broadens the risk pool the individual employee is in, providing a more stabilized market."
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ICHRAs can be an effective alternative to a traditional health plan model, but not necessarily for every employer. For instance, Wissig suggests ICHRAs for employers with at least 100 employees. Employers may also want to consider if this switch would enable them to substantially cover employee premiums. If moving to ICHRAs places more of a financial burden on workers, then plan participation is likely to drop, and employee health is bound to deteriorate.
Ultimately, Wissig and Horry believe workers need more agency when it comes to choosing their health plans, and the traditional group plans are obviously not working for many employers facing double-digit price hikes. Whether the ICHRA model is the best way for employers to switch things up remains a question for a company's benefit leaders and employees. Regardless of what their health plans look like, Horry encourages workers to advocate for themselves when dealing with carriers and ensure they're getting the most out of their existing benefits.
"Your first phone call to your [carrier] might not get picked up. Your second call might not get picked up," he says. "Be consistent, and don't be afraid to open your mouth and get what's best for you."
