Explore the evolving trends in HRA account types, witnessing a predominant preference for ICHRA and QSEHRA, strategic adoption of customized Specialty HRAs, and the budget considerations that guide businesses in navigating the diverse landscape of health reimbursement strategies.

HRA Account Types Findings:

• Groups are heavily leaning towards using the HRA structure for health insurance costs as opposed to reimbursement for other health expenses.
• Customized Specialty HRA accounts are on the rise, with groups strategically designing bespoke HRAs to address specific health and wellness needs within their employee population.
• When operating with a constrained budget, businesses are trending towards HRAs that cover premiums only, a pragmatic approach to managing costs while providing valuable health benefits.
• Monthly rollovers are a common feature in ICHRA and QSEHRA plans, allowing unused funds to carry over to the following month. Annual rollovers are not as widespread among employers, as not permitting them is a simple but effective way to save on costs.

Heavy Weight Towards ICHRA and QSEHRA in the Market (91% of Our Accounts Were Either ICHRA or QSEHRA)

The predominant trend observed in the market is a substantial preference for Individual Coverage Health Reimbursement Arrangement (ICHRA) and Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), collectively making up 91% of our accounts. This suggests a widespread adoption and recognition of the advantages offered by these specific HRA types among businesses and organizations.

‍No Budget Concerns with the ICHRA and QSEHRA Unlike the Specialty HRA 

Unlike the ICHRA and QSEHRA, which do not raise budget concerns, the Specialty HRA is positioned as a fringe benefit in today's cost-constrained business environment. This distinction highlights businesses' economic considerations and the strategic decision-making in selecting HRAs that align with budgetary constraints.

Of ICHRA Accounts, 61% Are Used Strictly for Premiums, While the Remaining 29% Include Eligible Medical Expenses, Deductibles and Co-insurance Support

Within the realm of ICHRA accounts, a notable percentage (61%) is dedicated exclusively to covering premiums. The remaining 29% take a more comprehensive approach, using their ICHRA funds for various expenses like medical costs, copays, coinsurance, and deductibles. These accounts are adaptable, reflecting the diverse healthcare needs of individuals by providing support for different aspects of their health expenses.

Specialty and Integrated HRA Used By Companies With a Unique Need

The adoption of Specialty and Integrated HRAs is particularly prevalent among companies with employees who highly value specific types of care. These forward-thinking and employee-centric organizations recognize the unique needs of their workforce and actively engage in employee surveys to identify expense reimbursement preferences. 

These surveys inform the creation of Specialty HRAs tailored to cover high-value items that resonate with employees, including fertility treatments, mental health, gender transition support, and more. This strategic approach showcases the adaptability of HRAs to meet diverse and employee-centric demands. 

As we analyze ICHRA accounts in 2023, distinct trends emerge in the health plans participants choose, different from what they would have chosen on the group market. 

Whether opting for cost-effective expanded bronze options or prioritizing plans with the best coverage at a reasonable premium, participants underscore the importance of extracting maximum value from their healthcare expenses. 

ICHRA plan participants prefer affordable plans with good coverage

When choosing health plans through ICHRA, participants lean towards perceived value. They prefer plans that are both affordable and offer comprehensive coverage. 

Many choose the cheapest expanded bronze options, emphasizing cost-effectiveness, or seek plans that provide the best coverage at an affordable premium. This shows a focus on getting the most value for their healthcare expenses.

‍Individual market carriers should innovate product offerings to prioritize affordability and comprehensive coverage

Carriers in this market should explore new ideas to create more affordable plan options with improved features. Innovating health plan offerings aligns with the changing preferences and priorities of participants. 

It presents an opportunity for carriers to stand out by introducing creative solutions that cater to the dynamic needs of individuals seeking cost-effective and beneficial health coverage.

Concerns about high out-of-pocket costs in the individual market

Both employers and employees transitioning to the individual market express significant concerns about the high out-of-pocket costs of many individual market plans. 

Employers hesitate to expose their employees to potential financial burdens due to inadequate coverage, high deductibles, and copayments. Some employers have chosen to cushion the higher out-of-pocket costs seen in individual plans by reimbursing employees for deductibles and co-payments.

How do businesses manage costs with a constrained budget in HRA trends?

In navigating the dynamic landscape of health reimbursement strategies, businesses with budget constraints opt for a practical approach by trending towards HRAs that only cover premiums. This strategic decision allows companies to manage costs effectively while still providing valuable health benefits to their employees.

What is a common feature in ICHRA and QSEHRA plans to manage unused funds?

A notable standard feature in the evolving ICHRA and QSEHRA plans is the incorporation of monthly rollovers. This feature enables the efficient management of unused funds, allowing them to carry over to the following month, optimizing the utilization of resources.

How do ICHRA accounts allocate their funds?

There is a discernible allocation trend within the realm of ICHRA accounts, with 61% of these accounts exclusively dedicated to covering premiums. The remaining 29% take a more comprehensive approach, utilizing ICHRA funds for various expenses such as medical costs, copays, coinsurance, and deductibles. This adaptability reflects the diverse healthcare needs of individuals and provides support for different aspects of their health expenses.

Why do companies adopt Specialty and Integrated HRAs?

Companies are increasingly adopting Specialty and Integrated HRAs as a response to the unique needs of their workforce. This forward-thinking and employee-centric approach involves actively engaging in employee surveys to identify specific expense reimbursement preferences and informing the creation of Specialty HRAs tailored to cover high-value items such as fertility treatments, mental health support, and gender transition assistance.

What are some examples of high-value items covered by Specialty HRAs?

Specialty HRAs exemplify adaptability by covering high-value items that resonate with employees' diverse needs. Examples include fertility treatments, mental health support, gender transition assistance, and more. This strategic approach showcases the flexibility of HRAs in meeting the evolving and employee-centric demands of today's workforce.

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.