As if health benefits weren’t complex and expensive enough, the economic downturn in the middle of a global pandemic has complicated the enrollment process. Many employers, especially those with smaller or non-traditional employee populations, are facing higher rates or inflexible contracts that may not be realistic or financially comfortable for the 2021 plan year. Fortunately, between new solutions in the market and the Department of Labor (DOL) providing much needed administrative relief due to the COVID-19 emergency, employers have more options than ever. The Individual Coverage Health Reimbursement Arrangement (ICHRA) is one such solution that Gravie offers and here are the important things to know about it this year:
What is it? Under the ICHRA, employers can offer tax-free contributions to employees’ health benefits that they can use to shop on the Individual Market. In this defined contribution model, employers can set a budget that they are comfortable with and employees can use those contributions to select a health plan from a wide variety of carriers to fit their individual or family needs.
Why are employers choosing this solution? Like many Gravie solutions, ICHRA offers a flexibility that most traditional group plans do not, allowing employers to set their own budget for health benefits that employees can use to select the plan of their choice. In the ICHRA model specifically, the employee “owns” their health plan – they can take it with them if their job status changes – and employers are relieved of the burden of selecting a one-size-fits-all plan for their population, simply acting as the co-financier. In many cases, the Individual Market can offer some of the most affordable plans for employees.
What’s new this year? When ICHRA was made available in 2020, the DOL imposed a 90-day notification requirement essentially telling employers that if you’re going to let employees choose their own health plan through ICHRA, you need to give them at least a 90-day notice to shop for and select their own plan. In the midst of the COVID-19 pandemic, though, the DOL has made extra allowances for employers, instead simply asking that they notify employees “as soon as administratively practicable” to give them ample time to shop for a plan, knowing that 90 days might be a luxury some businesses don’t have right now.
ICHRA with Gravie: Gravie is among few partnering with employers to offer employee health benefits through ICHRAs. Gravie experts, along with Gravie’s employer portal, make it easy for employers to implement and manage their ICHRA health benefits. We make it easy for employees too. Gravie’s intuitive shopping tool walks employees through choosing a plan, and Gravie Care Advisors are available to answer any questions along the way.
To learn more about ICHRA, how to administer or notify your employees of this benefit this year, contact us!