PeopleKeep’s 2021 ICHRA Report finds increase in Benefit Allowances and state-based classes

PeopleKeep, the leader in personalized benefits for small to medium-sized organizations and the first company to bring an individual coverage HRA (ICHRA) to market, has released the second installment of its 2021 ICHRA report.

The report uses PeopleKeep’s proprietary product data to reveal insights into how employers today are using their ICHRA benefit compared to last year, how applicable large employers (ALEs) use the benefit differently than smaller employers, as well as how ICHRA use cases differ from the qualified small employer HRA (QSEHRA).

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Key findings from the report include:

• The average employee allowance is $882.51, an increase of 5% from last year.
• Employers with an ICHRA offer more in allowances than employers with a QSEHRA, which enforces an allowance cap, across all family statuses—as much as 142% more.
• Employers that extend their ICHRA benefit to cover both insurance premiums and other eligible medical expenses (“premium-plus accounts”) offer 93% more in allowances than employers with a premium-only account.
• 58% of employers choose this expansion to “premium-plus” to enable employees to use their ICHRA allowance towards premiums and other medical expenses.
• ALEs utilize more employee classes than smaller employers for an average of 3.6 classes used in their ICHRA benefit.
• State-based classes have grown in adoption, likely due to increased hybrid or remote working environments where employers now have employees spread across states.
  • 5% more employers utilized state-based classes this year compared to 2020.
  • An additional 24 states were represented this year compared to 2020.

“It’s exciting to see that not only are employers who offer an ICHRA health benefit taking advantage of higher allowance amounts, but they’re also including employees from more states than we’d ever seen before,” explains Victoria Hodgkins, CEO of PeopleKeep.

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“The individual coverage HRA may become the ideal health benefit for the increasingly remote working world. With an ICHRA, employees who know their local healthcare provider network better get to choose their own plan while employers can tailor allowance amounts to the specific insurance market conditions for each employee.”

PeopleKeep plans to release a third and final installment of their 2021 ICHRA report this fall with an in-depth sentiment analysis from organizations using the ICHRA. This report will focus on how employers’ experiences with the ICHRA differs from their experiences with traditional group health insurance plans.

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