Health benefits

ICHRA is changing the face of employer-sponsored health benefits

When most business leaders are introduced to the concept of ICHRA, a relatively new model of employer-sponsored health benefits that offers long-term budget control and the potential for significant savings compared to group benefits traditional, their first reaction is somewhere along the lines of “sounds too good to be true.”

That’s the sentiment expressed by Jon Gaines, vice president of finance at WWBIC, a statewide economic development company based in Milwaukee. The organization had been enrolled in a group health plan almost since its inception, but began weighing new options during the December 2020 renewal period to combat the surge in annual premiums – which topped 35%. WWBIC could not continue to shoulder the financial burden with high cost sharing.

“We are a small, fast growing company with a limited number of employees,” Gaines explained. “A lot of it was really the dollars involved – the [cost] was just getting very prohibitive in terms of our ability to support a health plan at WWBIC. “

When they turned to zizzl for a health insurance solution, WWBIC executives were surprised to learn about ICHRA, a new employer-funded health coverage option.

“I kept thinking ‘How come we haven’t heard of this?” said Patti Lohmann, who heads the company’s human resources. “The cost savings have been very positive, but they have also given our staff many options. Our employees were pleasantly surprised when they saw that they might not have to pay anything for this benefit.

The ICHRA, acronym for Individual Coverage Health Reimbursment Arrangement, allows employers to reimburse premiums for individual market coverage selected by employees, tax-free.

It gives businesses control over their budgets and allows employees to choose their own health care coverage, rather than having their employer choose a group plan on their behalf or purchase comprehensive insurance.

According to the HRA Council, more than 74% of companies offering health insurance only offer one type of health plan to their employees.

For WWBIC, part of the appeal of ICHRA was giving employees choice, but with a reimbursement process as easy to navigate as a group plan.

“The most important thing was that we could offer more and better options,” said Gaines. “That sigh of relief from our team and not, ‘Oh my God, here’s another increase, cost-sharing that we have to do. “We’ve actually cut costs for our employees. For WWBIC too. It’s been a complete shift where we actually have savings… and can use those dollars to use them in other areas of our business.

Since the ICHRA was first enacted by the federal government in 2019 to help reverse the declining percentage of employers in small businesses offering health insurance, the benefit model has largely gone under the radar. But the voluntary option is quickly gaining ground due to the extent of its quality coverage and cost savings.

At Milwaukee Cylinder, signing an ICHRA through zizzl meant the manufacturer could “step out of the benefits business” and put the reins in the hands of their employees – with guidance from their team of zizzl brokers.

Earlier this year, the company’s vice president of finance, Justin Dahm, looked at renewal costs for “big projects that were out of this world.”

When he heard about ICHRA from zizzl, he was surprised by the number of quality plans available from major health insurers as part of the program and the support that would be provided to employees throughout the period. transition, many of whom were new to learning and selecting their own health coverage.

“We didn’t really have the knowledge or the ability to give all of our employees the information they needed to select the right deals,” Dahm said. “There was also a lot of hand held on our side. zizzl really explained all of this to us in layman’s terms for those of us who didn’t know the benefits. Dahm added that employees also benefited from zizzl’s on-site presentations on the ICHRA during the enrollment period, the broker’s online health plan review to help employees narrow down their coverage options and the concierge service to help them choose the right diet.

When all was said and done, the company and its employees were thrilled with the results of an ICHRA benefits plan.

“We did a business analysis and that was the right way to go,” Dahm explained. “We looked at different insurance plan options that were available. In the end, we were looking for a better solution. The ICHRA had great options for employees based in Wisconsin. We decided to go for it. “