5 ways ICHRA empowers HR leaders to empower their most valuable asset

HR leaders everywhere have to strike the seemingly impossible balance between what's good for the business and what's good for employees. When juggling people and cost, it leaves HR with few choices and lots of pressure, especially when it comes to employee health benefits. A new solution, called an Individual Coverage HRA (ICHRA), is transforming how HR leaders manage employee benefits. By providing a fixed monthly allowance for employees to purchase individual health insurance, ICHRA helps strategic HR leaders drive profitability and growth through personalized employee benefits. The secret? ICHRA helps HR leaders empower the company's most valuable asset: their workforce.

Here are the top five ways HR leaders are leveraging ICHRAs to empower their team (and their business!). Keep these in mind as you sharpen your HR benefits strategy.

Top 5 ways HR leaders are leveraging ICHRA to win at work 

1. Gives HR Leaders Control Over Unpredictable Costs 

With traditional group health insurance, premium hikes are difficult to predict and impossible to control. ICHRA allows companies to set a fixed monthly allowance for employees, which remains stable regardless of participation or usage. This predictability enables HR leaders to confidently forecast and communicate healthcare costs to financial executives, turning an unpredictable expense into a manageable budget line item. 

For those facing high renewals, many HR leaders are forced to shift costs to employees, meaning that employees will have more taken out of their paycheck each month. This isn't a long-term solution, and it's often met with more stress for the HR team that fields the complaints. 

Now let's consider the worst case scenario. A $1M health insurance renewal could result in mass layoffs with severe business implications. ICHRAs can be another budget lever to pull while keeping your workforce intact. 

2. Delivers Personalized Benefits to a Diverse Workforce 

Today's workforce is more diverse than ever, with up to four generations working side by side. A one-size-fits-all group plan is often a poor fit for employees with varying healthcare needs, locations, and life stages. ICHRA empowers employees to choose their own health insurance plan, allowing them to access preferred doctors and specialists in their local area and select coverage that aligns with their personal needs and budget.

Think of it this way. We work so hard to have vibrant, diverse workforces, so why should we also be asking our teams to fit within a one-size-fits-all health plan? It shouldn't be like that; a young, single employee probably has different health preferences than a middle-aged mom with kids that play sports.

Some employees might need to ensure certain speciality drugs are covered, or even doctors they depend on remain in-network. There's no way to do that with a group health plan. Personalized care and individual autonomy over healthcare is the key to engaged employees that not only use their benefits, but enjoy them.

3. Serves as a Powerful Recruitment and Retention Tool 

In a competitive job market, flexible and customizable health benefits are a major draw for candidates. By offering ICHRA, HR leaders can provide a benefit that is both flexible for job seekers and helps retain top talent. In other words, HR strategies for employee retention are hinged upon personalization. Employees who feel their health needs are well-served are happier and healthier, and they are more likely to stay with a company long-term.

One Take Command client earned a 96% employee satisfaction score after rolling out their ICHRA, underscoring the critical importance of employees that feel valued, empowered, and taken care of. 

While traditional group health insurance can also be effective tools for HR recruitment, if the offering isn't what employees want, it's not serving who it was designed for. As an example, if participation drops, know that it's likely due to dissatisfaction with the offering, either for cost reasons or network. When employees can choose what's best for them, the benefit offering is hitting its target. That's why Individual Coverage HRAs are among the most effective HR recruitment tools. 

4. Ensures Fair Benefits for All Employees 

ICHRA is an ideal solution for businesses with a mix of salaried, hourly, and seasonal employees. HR leaders can use employee classes to provide fair allowances based on job type or geographical location, ensuring every employee receives an appropriate healthcare benefit. This customization extends to employees in different states, as they can choose insurance based on their local network.

Here's an example to bring this to life. One client had employees spread out across states and counties, but they had one health plan for all. Employees in certain areas were served well; they had low costs and high value with their plan. In other rating areas, however, choices were limited or required a long drive to see a doctor. Out of state employees couldn't access their Kaiser Permanente health plan. By leveraging ICHRA classes to designate different amounts to employees in different areas, HR leaders can promote equity across the workforce when it comes to health benefits. Those at headquarters could still use Kaiser Permanente, and those out of state could select local plans that worked with conveniently located doctors of their choosing. 

5. Creates Savings That Can Be Reinvested in the Employee Experience 

Switching from a traditional group plan to ICHRA often results in significant cost savings—sometimes hundreds of thousands or even millions of dollars. HR leaders can leverage these savings to fund other strategic initiatives that benefit the company and its employees, such as increasing referral bonuses, investing in learning and development programs, or offering wellness stipends. This helps reinforce a positive work environment and supports both recruitment and retention efforts. Plus, it makes the HR team look like total heroes, delivering choice and personalization to employees and value and savings to the C-Suite. 

HR Benefits Strategy and ICHRA: Is it for you?

If you're an HR leader that struggles with your group health plan, the choices that come with it or the renewals that continue to roll in, it's time to price out an ICHRA to see how it stands up to your current solution. We see ICHRA success with companies that have: 

• Low participation
• High claimants
• Dispersed and diverse workforce 
• High renewals
• Variable hour employees or a mix of employee types (like part-time, salary, hourly)

Now's the time to see if ICHRA fits into your HR benefits strategy. Download our new HRAs for HR leaders ebook, written by our very own SVP of People Ops, Andy Lange. Or you can learn more about how HRAs support HR at the leadership table.