ICHRA Solution for Employees Over 65

Senior employee populations are often high-utilizers of a business group health plan, leading to rate increases for the entire group. For businesses with a number of older employees, the Individual Coverage Health Reimbursement Arrangements (ICHRAs) can be a strategic solution that allows businesses to save overall on their group health plan while continuing to provide benefits for employees over the age of 65.

By transitioning the entire employee population to an ICHRA, companies can strategically leverage Medicare for their senior employees while providing flexibility and savings for the entire workforce.

A Liferaft client in New Jersey had several employees over the age of 65 who were high utilizers of their group health insurance plan. This led to a significant rate spike in their overall premium cost when their plan came up for renewal. 

This increase in their premium made it too expensive for them to continue offering the same level of coverage to their employees. Balancing quality healthcare benefits while keeping the coverage affordable requires a more tailored and financially sustainable solution.

Liferaft proposed a comprehensive solution: transitioning all employees to the ICHRA model. By doing so, the company effectively shifted its senior employee population to Medicare while providing a more flexible and cost-effective healthcare solution for all employees.

By introducing an ICHRA compliant with ACA standards to all employees, the client ensured that Medicare-eligible employees  received a monthly reimbursement designated explicitly for their Medicare premiums. This arrangement empowered the employer to allocate an annual budget, allowing eligible employees to use these designated funds to cover their insurance or Medicare premiums. Liferaft streamlined the transition from traditional group health insurance to the ICHRA by defining appropriate employee classes, offering a seamless and tailored healthcare solution for all employees.

By transitioning eligible employees from the group health plan to the ICHRA, the company managed costs more effectively while ensuring comprehensive healthcare coverage for its aging workforce. 

• Consultation with Liferaft: Companies partnering with Liferaft begin with a consultation to discuss their specific requirements and objectives. The Liferaft team works closely with the company to ensure the ICHRA plan meets their needs.

• Transition Off Group Plan: All employees transition off of the company's group healthcare plan and enroll in individual coverage or Medicare. 

• Reimburse Employees: With Liferaft’s user-friendly platform; employees will submit reimbursement requests for their health insurance premiums. The reimbursement funds they receive are based on the company's limits.

What is an ICHRA, and how does it differ from traditional group health insurance?

ICHRAs are employer-funded arrangements that offer employees a monthly allowance to purchase individual health insurance. Unlike traditional group health insurance, ICHRAs give employees more flexibility in selecting plans that suit their needs while complying with ACA regulations.

Are there specific eligibility criteria for employees participating in an ICHRA?

Employers can structure ICHRAs for specific classes of employees allowing them to transition from group health insurance to individual coverage. Eligibility often depends on employer designations and compliance with ACA guidelines.

How does an employer determine the funds allocated to employees under an ICHRA?

Employers set the ICHRA allowance based on employee class, family size, and geographic location. The allowance must also be deemed affordable under the ACA threshold. This predetermined amount is a monthly healthcare stipend for employees to use towards eligible healthcare expenses.

Can employees use ICHRA funds for any healthcare expenses?

ICHRA funds can be used for eligible healthcare expenses, including individual health insurance premiums, copays, and other qualified medical costs. Employees can leverage these funds for approved medical expenses outlined in the ICHRA plan.

What are the advantages of implementing an ICHRA for employees over 65 years old?

For employees over 65, ICHRAs offer the flexibility to directly access and pay for Medicare premiums. This allows companies to control healthcare costs while ensuring eligible employees receive tailored and comprehensive healthcare coverage through Medicare plans.

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.