SureCo Analysis Finds ICHRAs Vastly Expand Consumer Choice, Strengthen Individual Insurance Markets

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Oct 30, 2023, 08:05 ET

Sample of more than 4,000 employees across industries shows preference for comprehensive coverage ahead of the November 15 employer health election window.

SANTA ANA, Calif., Oct. 30, 2023 /PRNewswire/ -- While most employers offer only one health plan to their employees, employees with employer-sponsored Individual Coverage Health Reimbursement Arrangements (ICHRAs) on average are choosing from 23 plans, according to a new survey by SureCo, the leader in helping businesses provide customized healthcare options to employees.

A sample analysis of over 4,000 employees in ICHRA plans also found the average age of people enrolled is 34 years old.

One company offered its employees a staggering 172 plan choices. This variety of choices ICHRAs offer is in sharp contrast to limited offerings employers provide through group health insurance plans. In 2022, 75% of firms offering health benefits offered only one type of health plan, 20% offered two and only 5% offered three or more, according to the Kaiser Family Foundation 2022 Employer Health Benefits Survey. SureCo's Enrollment Platform includes 5,000+ Affordable Care Act (ACA)-compliant plans from 140 major carriers.

ICHRAs are a newer model of employer-sponsored health coverage that provide employees with tax-free reimbursements to use for purchasing their own plan in the individual market, offering employees greater choice to tailor their insurance while saving both them and their employers money.

"ICHRAs break free from the one-size-fits-all approach, allowing employees to personalize their plans according to their unique circumstances, including varying levels of coverage and benefits," said Matthew Kim, CEO and co-founder of SureCo. "With employees at different life stages and spread across various locations, traditional group benefits struggle to accommodate everyone's individual needs. ICHRAs promote individualization, while considering the diverse needs of an ever-changing workforce."

The survey found additional ICHRA enrollment trends, including:

The switch to ICHRAs appears to strengthen the risk pool in the individual insurance market, as the average age of individuals enrolling in an ICHRA is 34 years, demonstrating the role ICHRAs are playing in moving younger and presumably healthier workers into the individual market. This bolsters a central promise of the Affordable Care Act to produce a robust individual marketplace. It also contradicts the naysayers who predicted ICHRAs would weaken individual markets by overburdening them with older employees with more health problems.
62% of individuals enrolled in an ICHRA retained their initial plan selection year-over-year, signaling a high level of initial satisfaction.
Among individuals aged 18 – 64, there is a significant inclination toward opting into comprehensive coverage, with 48% of individuals choosing a high (Gold) level plan.

The 450 employees at Anuvu, which provides in-flight and on-ship internet access, elected 146 different plans out of the 172 plans offered. It's a menu of choices that Misty Lundstrom, Sr. Director Global Total Rewards & Talent Acquisition at Anuvu, found appealing. "I saw a disparity in which benefits employees could afford to take advantage of and was determined to close that gap," Lundstrom said. "Some people, for example, were getting $20,000 worth of a medical benefit every year from us, whereas other individuals don't need to use their health insurance at all. I wanted a way to level the playing field, and moving to an ICHRA was a big step toward making it happen."

"ICHRAs are a triple win," Kim said. "Employees win greater choice. Employers win savings. And the nation wins with a stronger individual insurance market."

ABOUT SURECO

SureCo, its subsidiaries, and its partners are at the forefront of healthcare change in the U.S., serving businesses, brokers, and consumers. Established in 2015, the company develops pioneering programs and solutions that promote improved health while lowering healthcare costs and improving the quality of care. SureCo leads the industry in new care options, technology, and administration opportunities. Its mission is to create a better healthcare system for all working Americans. For more information, visit www.sureco.com.

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SOURCE SureCo