Liferaft's Tailored ICHRA Solution for Part-Time Faculty

A Liferaft client, a reputable university in the Midwest, encountered a dilemma concerning 500+ part-time professors who were union members. The union's health insurance did not cover these part-time faculty members, prompting them to strike for this essential benefit. Unfortunately, the university's budget constraints made extending health insurance coverage to all part-time employees financially unfeasible.

To address this challenge effectively, Liferaft collaborated with the university to implement an Individual Coverage Health Reimbursement Arrangement (ICHRA) explicitly tailored for its part-time faculty members. By strategically classifying employees, the university could provide health benefits to its part-time workforce while maintaining its group health plan for full-time employees.

Providing their current insurance to 500+ part-time instructors would have been cost-prohibitive.

Instead, they budgeted $200,000 annually and were able to reimburse a percentage of each employee's premium based on their age, ranging from $30-90/month per employee.

ICHRA employee classes serve as customizable categories that employers can establish based on various job-related criteria. These classes enable employers to differentiate contribution amounts based on factors such as full-time versus part-time status, geographic location, job position, and tenure.

Common Types of Employee Classes:

• Full-Time Employees: These typically work a standard number of hours per week, often with a fixed schedule, and are eligible for various employment benefits.
• Part-Time Employees: Part-time employees work fewer hours than full-time employees and may have different benefit eligibility criteria.
• Seasonal Employees: These employees are hired to work during specific seasons or periods of increased demand, such as holidays or summer months. Their employment duration is limited.
• Temporary Employees: Temporary employees are engaged for a specific project or a predetermined period, and their employment is not intended to be permanent.‍
• Contractors/Freelancers: Contractors and freelancers are not considered regular employees but may be engaged on a contractual basis to provide specialized services.
• Union Employees: Union employees are part of a labor union and often have negotiated benefits and coverage under collective bargaining agreements.
• Salaried Employees: Salaried employees receive a fixed salary regardless of the hours worked. They may have different benefit structures compared to hourly employees.
• Hourly Employees: Hourly employees are paid based on the number of hours worked and may have different benefit eligibility criteria.

Liferaft closely collaborated with the university throughout the implementation process, defining employee classes and ensuring compliance with regulations. Together, they crafted a tailored tiered reimbursement strategy, enhancing satisfaction and retention among part-time faculty members.

Defining Employee Classes

The university categorized its part-time workers based on hourly work requirements, enabling precise differentiation in benefit allocation. Liferaft structured the reimbursement levels based on the employees’ age, recognizing that age significantly impacts the price of insurance premiums. This tailored approach ensured that each employee received benefits aligned with their unique circumstances.

Ensuring Compliance

Liferaft played a crucial role in guiding the university through regulatory requirements, ensuring seamless integration of the ICHRA alongside the existing group health insurance plan. This meticulous attention to compliance helped the university avoid potential legal pitfalls and maintain regulatory adherence throughout the implementation process.

Budgetary Considerations

Liferaft collaborated closely with the university leadership, walking them through a variety of reimbursement scenarios to determine the most suitable approach. This collaborative process allowed the university to select a reimbursement strategy that aligned with its budgetary constraints and organizational goals. Together, Liferaft and the university established a maximum target budget for benefits, providing financial predictability while accommodating potential enrollment fluctuations.

Reimbursement Strategy

After considering various options, the university decided to implement a tiered dollar reimbursement strategy. Liferaft facilitated this decision-making process, providing guidance and expertise to ensure that the chosen strategy met the diverse needs of part-time faculty members. This tiered dollar reimbursement approach allowed for flexibility and fairness in compensating employees for their healthcare expenses, enhancing employee satisfaction and retention.

‍

Working with a union poses unique challenges, particularly in the middle of a strike. Clear and understandable documentation was essential to gaining support and cooperation from union members, ensuring transparency and trust throughout negotiations.

Labor negotiations demanded flexibility and adaptability in crafting benefit proposals. Liferaft was readily available to collaborate with leadership and union representatives, developing new scenarios and proposals tailored to evolving needs and preferences. This approach facilitated constructive dialogue and collaboration, successfully implementing benefit plans that met the needs of all parties involved.

Additionally, education about how ICHRAs worked was vital in garnering support and understanding among all stakeholders. Liferaft met with the college leadership to provide detailed explanations of HRAs, including how they functioned and their benefits. This preparation equipped them to address questions and concerns effectively, ensuring a smoother transition to the new benefit plan.

What is an ICHRA?

An Individual Coverage Health Reimbursement Arrangement (ICHRA) allows employers to reimburse part-time employees for individual health insurance premiums and medical expenses. It provides flexibility and empowers employees to choose a plan that best suits their needs.

What factors influenced the university's decision to implement a tiered dollar reimbursement strategy?

The tiered dollar reimbursement strategy was chosen to provide flexibility in compensating employees for healthcare expenses based on their age and individual circumstances, ultimately enhancing satisfaction and retention among part-time faculty.

What considerations were taken into account when establishing a maximum target budget for benefits?   

Collaboration between university leadership and Liferaft involved analyzing potential enrollment fluctuations and aligning the budget with organizational goals, ensuring financial predictability while providing adequate healthcare benefits.

How did implementing the ICHRA impact employee satisfaction and retention among part-time faculty?   

Implementing the ICHRA enhanced employee satisfaction and retention among part-time faculty by providing affordable healthcare benefits tailored to their needs, fostering a positive work environment.

How did the university ensure that the implementation of the ICHRA was a success?

The success of the implementation relied on meticulous planning, collaboration between stakeholders, and adherence to regulatory requirements, ultimately resulting in affordable healthcare benefits for part-time faculty members without straining the university's budget.

Our team knows the ins and outs of the health insurance marketplace and will guide you towards the solution that make the most sense for your business and your team. Come with questions! Our experts are happy to dig into the details to get you the clarity you need.

During the call, Liferaft will run a cost-benefit analysis on your company's current healthcare spending and show you different ways you can save—without sacrificing plan quality. After your consult, Liferaft will design a unique plan for your employee's health insurance, including suggested plans and accounts, plan policy documents, and the annual budget.