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Employers are beginning to see
the value of individual coverage health reimbursement arrangements (ICHRAs),
managed care insiders tell AIS Health. Brokers and third-party experts say
that while uptake has been slow so far, the ICHRA market could take substantive
amounts of business away from both self-funded and fully insured commercial
insurance books, particularly among medium-sized employers.
Size of ICHRA market isn’t
known
- ICHRAs allow
employers and employees to purchase Affordable Care Act marketplace
plans. Employees select a plan on a health exchange or through a private
broker, and their employer reimburses the member each month for a fixed
amount of premium.
- Unlike exchange
plans purchased by individuals, exchange plans purchased as part of
ICHRA are not subsidized by advance premium tax credits. The market is
still in its infancy: ICHRAs were created by the Trump administration in
2019, and the first policies in the segment were sold for the 2020 plan
year.
- But
participation from employers in ICHRAs is likely to grow, according to
health benefits experts. Brokers seem to see ICRHAs as a growth area as
well: online brokerage eHealth said this
week that it would begin selling ICHRA products alongside more
traditional plans.
- “The question
of how big the ICHRA market is right now — it’s something that a lot of
people are curious about, and nobody really has an answer,” Katherine
Hempstead, Ph.D., senior policy adviser at the Robert Wood Johnson
Foundation, tells AIS Health. “Everyone’s got a piece of the elephant,
but nobody knows how big the elephant is.”
Companies with national
workforces could find advantages
- With the
selling season for 2023 underway, brokers and benefit consultants tell
AIS Health that there is growing interest in ICHRAs from
purchasers.
- “We’re seeing
increased interest from, potentially, employer groups,” Lauren
Efferding, senior benefits consultant at Milliman Inc., tells AIS
Health. Efferding authored a white
paper on ICHRAs in June.
- Efferding says
that ICHRA purchasers don’t necessarily fit a profile.
- “We’ve seen
groups of varying sizes,” Efferding says. “I think that the really
unique thing about what ICHRA offers…with the classing options that you
have, yes, you can look at it as a full replacement for your entire
population. But you can also look at it in different segments of the
country.”
- Ryan Jessell,
managing director at the benefits consulting firm and brokerage WTW,
tells AIS Health that he’s encountered the same interest from employers
that are expanding to new geographies or have a nationally dispersed
remote workforce.
- “Employers that
have traditionally been very regionally focused…but they want to stretch
out more nationally for some of their corporate talent…this actually
makes it easier for them to do that,” Jessell says. “Because their group
plan, in the past, may have been based on a more localized regional
network, or a more localized regional group carrier. Now they can kind
of stretch their recruiting capability and offer those out-of-area
people an ICHRA.”
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