in the US healthcare and benefits landscape in recent decades. ICHRA allows employers to move from the old model of defined benefit - where they decide top-down on health coverage - to defined contribution - giving each employee a stipend to decide on the plan that is right for them.
But, like any new significant change, ICHRA comes with its set of challenges.
In this post, we’ll explore three of the most common challenges employers face when transitioning to ICHRA and provide actionable strategies to help make the shift successful.
ICHRA is based on the individual market, where health plans are priced based on age, location, and dependents and requires that the employer decides on an allowance model.. This may seem daunting at first as the pricing structure is different from traditional group plans.
The solution? Work with ICHRA specialists familiar with the structure of the individual market, allowance models, and all rules and regulations around it. But why settle for those who only know about ICHRA? We recommend working with smart, technology-driven specialists to make sure you have clear control and visibility and into an otherwise complex market. Zorro’s platform is powered by smart analytics and combines our agency expertise with engineering logic to make the ICHRA setup seamless.
ICHRA is a shift from traditional employer-provided insurance. While employees want and appreciate the diversity and choice that ICHRA gives them, they can be afraid of change. A clear and thought-out employee engagement plan is paramount to the success of implementing ICHRA.
Not sure where to start? At Zorro, we have the formula and assets to help agents and HR teams introduce and implement ICHRA. We create clear and concise materials explaining the key aspects of ICHRA, such as eligibility criteria, reimbursement processes, and available insurance options. We help facilitate effective employee engagement through various communication channels including informational sessions, webinars, intranet portals, personalized support, and addressing individual concerns. All this contributes to a clear understanding and acceptance of the new benefits structure.
ICHRA is subject to compliance and legal requirements, including nondiscrimination rules, notice obligations, and reporting requirements. Keeping up with evolving regulations and staying compliant is critical to ensure you make the most of your benefits. Given the complexity of healthcare regulation, it is wise to speak with benefits professionals with expertise in ICHRA to ensure a thorough understanding of the legal framework and minimize the risk of noncompliance. At Zorro, we’ve automated the process to regularly review and update your ICHRA plan to accommodate any regulatory changes, ensuring a compliant and smooth administration.
While ICHRA is an incredible opportunity for cost-savings, budget-control, and employee satisfaction, it also presents its share of challenges. It is a major shift, and it requires the right design strategy, launch planning, and implementation plan. Our single most important piece of advice is to choose your partner wisely! Make sure that you're working with a company that can provide end-to-end solutions for all ICHRA-related challenges.