Large companies with over 50 full-time employees often face a common challenge: skyrocketing renewal rates for group health insurance. These organizations are on a quest to safeguard their profit and loss (P&L) statements from the relentless surge in healthcare costs. That's where Liferaft steps in with a solution, the Individual Coverage Health Reimbursement Arrangement (ICHRA).
Large companies with over 50 full-time employees grapple with a double-edged sword regarding healthcare costs. These organizations not only face the uphill battle of dealing with ever-increasing healthcare expenses but also the complex web of Affordable Care Act (ACA) compliance.
The ACA mandates that applicable large employers (ALEs), those with 50 or more full-time equivalent employees, provide healthcare coverage to at least 95% of their full-time employees. This requirement reflects a commitment to ensuring employees access affordable health coverage.
However, non-compliance with the ACA can have consequences for your business. Failure to meet this mandate may result in financial penalties, known as Employer Shared Responsibility Payments (ESRP). These penalties act as financial consequences for not fulfilling the ACA's order to provide affordable health coverage to employees. For businesses, this translates into increased operating costs and potential financial strains on your organization's bottom line.
The Liferaft Solution
Liferaft understands the intricacies of the modern healthcare landscape and has crafted an innovative approach to address these issues. By partnering with Liferaft, companies can implement an ICHRA tailored to their unique needs, all while ensuring compliance with the ACA. Liferaft's ICHRA solution tackles these challenges on multiple fronts:
- ACA Compliance: Liferaft takes the guesswork out of ACA compliance by structuring ICHRA plans that meet the requirements of the law. This ensures that reimbursements offered to employees are deemed affordable under ACA standards.
- Say Goodbye to Traditional Group Health Insurance: With Liferaft's ICHRA solution, companies no longer have to deal with the high costs and uncertainties associated with traditional group health insurance.
- Budget Predictability: One of the most significant advantages of the ICHRA approach is the ability to set yearly budgets with no surprise costs. Companies will know that their employees are covered while adhering to ACA compliance, all within the budget they set.
- Customization at its Core: Liferaft empowers employers to classify employees into different groups and age bands, enabling them to set specific reimbursement limits for each employee. This level of customization ensures that the ICHRA perfectly aligns with the company's unique structure and needs.
How It Works
Liferaft's process is designed to be simple, efficient, and fully supportive of companies transitioning to ICHRA. Here's how it works:
- 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.
- Employee Enrollment: Liferaft simplifies the enrollment process for employees. They meet with Liferaft agents who guide them through enrolling in individual health insurance plans available on the exchange. This empowers employees to choose the coverage best suits their unique healthcare needs.
- Reimburse Employees: With Liferaft’s user-friendly platform, employees will submit reimbursement requests for their health insurance premiums or other eligible medical expenses. The reimbursement funds they receive are based on the company's limits.
Frequently Asked Questions
What is an ICHRA, and how does it work?
ICHRA stands for Individual Coverage Health Reimbursement Arrangement. It’s an alternative to traditional group health insurance. It allows employers to reimburse employees for individual health insurance premiums. Employees select their insurance plans, and the employer provides tax-free reimbursements to cover the costs.
How does Liferaft ensure ACA compliance with its ICHRA solution?
Liferaft designs ICHRA plans that adhere to ACA compliance standards, ensuring that reimbursements meet the affordability requirements specified by the Affordable Care Act. This safeguards companies from penalties while providing employees with access to affordable coverage.
Can employers customize the ICHRA plans for different employee groups?
Yes, Liferaft's ICHRA solution offers customization options. Employers can classify employees into different groups and age bands, allowing them to set specific reimbursement limits tailored to the unique needs of each employee category.
What are the advantages of transitioning from traditional group health insurance to ICHRA?
Switching to ICHRA eliminates the uncertainty of high renewal rates associated with traditional group health insurance. Companies can set predictable budgets, and employees have the flexibility to choose insurance plans that best suit their individual needs.
How does Liferaft support the transition to ICHRA for employees?
Liferaft simplifies the enrollment process for employees by providing guidance and assistance. Employees meet with Liferaft agents who help them select and enroll in individual health insurance plans available on the exchange, making the transition to ICHRA straightforward and employee-focused.
Book your consult with Liferaft
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.