ICHRA offers small businesses flexible health benefits

Listen to this article

One option for small companies to start offering health care benefits for their workers would be an Individual Coverage Health Reimbursement Arrangement (ICHRA), said Thomas Purcell, vice president of health plan options at URL Insurance Group in Harrisburg.

Since 2020, ICHRA’s have allowed employees to pick their own insurance plans based on their needs, and their employers reimburse them through a pre-planned arrangement and amount.

Companies like URL will work with the employers to set up the plans, said Purcell.

“An  independent consultant will run the analysis for you with all the different insurance carriers available to those employees and small businesses,” he explained. “And they will meet with the business to present what the recommendation would be, whether that is an ICHRA or a group plan or nothing.”

Because employees pick their own plans, they can get coverage that works best for them depending on their medical needs and whether they are young and just starting a job, caring for a family or nearing retirement.

It has taken a few years for ICHRA’s to catch on, but Purcell said he thinks they have great potential to help companies offer some level of benefits.

“For an employer that wasn’t offering coverage before and doesn’t necessarily want to get into the health insurance space, this is a good baby step,” he said. “The employees have a lot more control, and they have more skin in the game, too.”

It is helpful to all involved that it is the employees who are picking their plans based on their personal needs, he explained.

“They can’t go back to their employer and say, ‘hey, I don’t like the plan you picked for us this year.’ They are in the driver’s seat,” he said. “And it’s a good steppingstone to offering benefits for businesses that have never offered benefits before.”

The plans can be viewed as financial benefits, he suggested.

“You’re picking a dollar amount or a percentage that you want to contribute to the employees premiums and then you are letting them go out and choose whatever health care best fits their needs,” Purcell said.

Thomas A. Barstow is a freelance writer