Gravie’s new study in partnership with Wakefield Research highlights a growing interest in individual coverage healthcare reimbursements arrangements (ICHRAs) among employers, even though some barriers are prohibiting them from offering this type of solution today.
The survey, conducted in August 2023, polled 500 health benefits decision-makers at companies with 1 to 1,000 employees that don’t currently offer ICHRAs, to better understand their awareness, consideration and perceptions of this tax-advantaged health benefits option for their employees.
Before taking the survey, approximately half (49%) of the respondents had not heard of ICHRA, but most showed interest in learning more. Interestingly, respondents from midsize and large companies expressed the most interest in learning about ICHRA options (92% among those with 50-299 employees and 94% among those with 300-1,000 employees).
“We know companies of all sizes can benefit from adopting an ICHRA to support their employees’ unique health and wellness needs,” said Gravie ICHRA General Manager Andrew Reeves. “We’ve been helping employers administer ICHRAs and similar marketplace solutions for almost a decade, and the model is finally catching fire as an increasing number of businesses are turning to ICHRAs and looking for help navigating the individual market, managing contribution strategies and meeting compliance requirements.”
Growing Interest and Adoption
According to the HRA Council, adoption of ICHRAs has more than tripled since they were introduced in 2020. Despite highlighting the need for more overall awareness and education, Gravie’s survey also indicated that the adoption rate for ICHRAs isn’t likely to slow down anytime soon. With medical trends increasing, the ability of employers to set a defined contribution towards their employees’ health benefits is a major part of the appeal.
As many as 89% of benefits decision-makers, who don’t currently offer them, are considering ICHRAs for their employees over the next three years. Others are looking further out, with 87% of respondents agreeing that ICHRA could be a long-term fit for their company.
Barriers to Overcome
While more benefits leaders are giving ICHRA a strong look as a potential new or expanded health benefits solution, many are stretched for time and resources. On average, they are spending nine hours per week managing health benefits for their company – and for nearly 3 in 4 (71%), managing health insurance is one of the most difficult parts of their job.
Benefits managers have demanding jobs and over 80% of respondents consider each of these factors a barrier to embracing ICHRAs:
- Helping employees navigate the marketplace.
- Managing employee contribution strategies.
- Providing ongoing support to answer employee questions.
- Staying compliant and up to date on regulatory changes.
Seeking New Solutions
Many employers rely heavily on brokers to bring them creative benefits ideas and, now more than ever, employers are seeking new options. More than 4 in 5 employers (86%) would be interested in their advisor bringing them more innovative, non-traditional solutions like ICHRA. And 83% would be more willing to offer an ICHRA if they had support from a dedicated vendor partner.
“For employers who are looking for alternatives to group health plans but that still allow them to contribute to their employees’ coverage expenses, ICHRAs are emerging as an incredibly appealing option,” said Reeves. “With the right partner working in concert with their advisors to manage compliance, contribution strategies, and marketplace navigation, ICHRAs really are meeting the needs of both employers and their employees.”
For more information, visit www.gravie.com/ichra.