A Broker’s Guide to ICHRAs

Brokers play a critical role in guiding businesses through the complexities of health insurance benefits; Individual Coverage Health Reimbursement Arrangements (ICHRAs) are simply the newest example of that. As clients consider whether an ICHRA is the right move for them, it creates new opportunities for brokers to generate revenue, relevance, and reach: Revenue in the form of consulting fees. Relevance as a thought leader for an increasingly popular benefit solution. And reach through lower administrative burden that frees up bandwidth — plus the potential for an expanded client base. 

As brokers know firsthand, the group insurance model comes with challenges that are difficult to overcome. Large annual premium increases leave employers scrambling to balance budgets. Employees have to absorb the costs their employers can’t. A one-size-fits-all approach means that people must select from plan options that don’t make financial and medical sense for everyone in the company. And many small businesses have been priced out of the market altogether.

Say Hello to the ICHRA

ICHRAs offer a new approach to employer-sponsored health benefits and a way to address cost and personalization challenges that once seemed impossible to overcome. Instead of a group insurance plan, each employee chooses their own insurance, subsidized by a pre-tax employer contribution. ICHRAs can make costs predictable, allow each employee to personalize their health plan, and ensure coverage is possible for businesses of every size.

A change in the way employer coverage is structured, of course, also represents change in business for brokers — but in many ways, that change isn’t as significant as it might first appear. Read on to see what changes — and what stays familiar — as we unpack the details of ICHRAs.