New Health Benefit for Employees Offers Individual Health Plans With Employer-Funded Reimbursement
Benefitfocus, Inc. , a leading cloud-based benefits management platform and services provider, announced its plan to support the implementation of individual coverage health reimbursement arrangements (ICHRA), which launched earlier this year. ICHRA, a company-funded, tax-advantaged health benefit used to reimburse employees for personal healthcare expenses, was made available to employers on Jan. 1, 2020.
Under new rules released by the Departments of Labor, Health and Human Services, and the Treasury, employers can offer a new “Individual Coverage HRA” as an alternative to traditional group health plan coverage, subject to certain conditions. ICHRAs can be offered by employers with more than 50 employees, as well as those with smaller workforces. If they choose to do so, they will then have 11 “classes” of employees, as determined by government regulations, from whom they can determine who will be offered ICHRAs. Each class of employee can only receive either the group plan or an ICHRA. ICHRAs can be used to reimburse premiums for individual health insurance chosen by the employee, among other medical care expenses. There are no limits to employer contributions with ICHRAs as compared to previous HRAs.
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“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 Ray August, President & CEO of Benefitfocus. “But for this to happen, employers and insurance carriers will have to rely on a company with experience in managing both group and individual benefit offerings. Since our platform connects the entire benefits ecosystem, we look forward to helping employers and their carrier partners leverage this new plan design.”
Benefitfocus is uniquely positioned to service this market by:
- 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.
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