Thanks to the recent HRA regulatory rules, ICHRA added a new class to its already pretty legitimate line-up: temporary employees of staffing firms. This is kind of a big deal, so let’s dive into all that is ICHRA and what the addition of this class means to you.
ICHRA (Ick-Rah) a.k.a the “Individual Coverage Health Reimbursement Arrangement” will allow employers to provide health care benefits to their employees regardless of the size of their business. ICHRA, or the evolution the existing tax-friendly QSEHRA (a great option for small businesses, see for yourself at the link above) allows for more personalization because of its easy to distinguish categories or “classes” of employees. It’s flexible, affordable, and tax-advantaged.
However, ICHRA cannot be offered alongside a group plan or to the same “class” of employee, it is not your traditional “one size fits all” model. ICHRA allows each employee to “cherry pick” what works best for them and their family. It can be designed to cover so many medical expense reimbursements (think dental work, prescriptions, and contacts, oh my!) It really is the bee’s knees of healthcare coverage.
We’ve mentioned even more of the benefits of ICHRA in our awesome and easy to understand ICHRA guide, check it out!
Temporary employees and ICHRA
Now, back to the new ‘temporary employee at a staffing firm’ situation…
In the past temporary staff was hard to manage due to the typically brief placement of employees at various businesses, higher employee turnover, and recruitment of the most qualified employees.
Because of this, temporary staff was offered different coverage, often called mini-med or indemnity plans, that did not meet ACA insurance coverage requirements. In 2015, staffing agencies were required to categorize their new employees with the “variable hour” group, who have had to wait a defined amount of time to receive healthcare coverage. This has led to even higher turnover because who has the ability to wait nearly a year (at some staffing agencies) to receive any healthcare treatment. Enter ICHRA and all its classiness.
ICHRA Classes and more about how they work here:
- Full-time employees
- Part-time employees
- Seasonal employees
- Employees covered under a collective bargaining agreement
- Employees in a waiting period
- Foreign employees who work abroad
- Employees working in the same geographic location (same insurance rating area, state, or multi-state region)
- Salaried workers
- Non-Salaried workers (such as hourly workers)
- Temporary employees of staffing firms (here’s our guy!)
- A combination of two or more of the above
What does it all mean?
It means that you as a staffing agency employer will have more flexibility and will be more likely to recruit and maintain “top-notch” employees by incorporating ICHRA into your coverage options. Temporary personnel will be able to receive fuller, more comprehensive healthcare coverage, and reduce adverse selection risk (happens when there is an imbalance of high-risk or sick individuals vs. healthy individuals, causing an increase in cost). As we all know, retention of and a quality workforce are a “must” in any business and adding this new class will allow just that.
The great thing about ICHRA is that employers can choose the budget that best works for them and then reimburse temp staffing that amount each month - a potentially major savings when you compare it to a group plan with skyrocketing costs.
Look at it this way, by offering better healthcare coverage you will recruit better employees and therefore better compensation on your end.
Still need help?
Chat with our team with any questions you may have about these new, tax-friendly benefits, how to find an ICHRA-compliant plan, or check out our new ICHRA Guide for more information on its background, setup process, requirements, and rules.
I wrote this blog because I care about ideas (big and little) that can help fix our healthcare system. I used to work on projects for Kaiser Permanente and the Parkland Health & Hospital System so I've seen the system inside and out. It's so important that consumers keep up with industry shifts and changing health insurance regulations. I'm also Take Command Health's Content Editor and a busy mom. Learn more about me and connect with me on our about us page. Thanks!