It’s not surprising that a relatively new benefits solution that was created on regulatory rules in a confusing industry comes with its fair share of misconceptions. We’re here to debunk those.
As a reminder, Individual Coverage HRAs (ICHRAs for short) allow companies to reimburse their employees for health insurance tax-free rather than buying it for them. The result? More cost control and flexibility for employers and more personalization and choice for employees.
Top ICHRA Myths, Debunked
ICHRA Myth #1: My client’s group plan does everything for me, sounds like I’ll be managing everyone’s insurance plan on ICHRA.
Take Command Reality: We manage everyone’s insurance enrollment in house! Not you. Onboarding? That’s us, too. If your clients have questions? We have a support team for that. You can choose to be as involved or as hands-off as you want.
ICHRA Myth #2: I don't want to sell ICHRA because I won't make any money like I do with group plans and Take Command might cut me out of the picture.
Take Command Reality: We view brokers as trusted partners because they play a pivotal role in helping companies solve their benefits challenges with ICHRA. We offer comparable commissions and value what brokers bring into the equation. We couldn’t do it without you!
Brokers are our key growth partners and we aim to structure our commission program so that you're made whole when switching your clients to ICHRA. We want you to recommend the solution that's best for your clients and for you to get compensated generously when we implement ICHRA programs together.
ICHRA Myth #3: “Is this the same as Obamacare? I heard that’s not good insurance. ICHRA sucks because the individual market sucks.”
Take Command Reality: While there used to be some truth to the quality of individual health insurance plans, that’s simply not the case anymore. Premiums have stabilized (along with MLRs), state-level reinsurance programs have spurred further market strength, each state has an average of five insurers to choose from—with many carriers expanding footprints, and, according to Ideon, rates for individual plans are lower than their small group equivalents in roughly half the country.
It’s high quality health insurance, many options with zero dollar deductibles, free telehealth or wellness incentives, that covers pre-existing conditions as well as 10 essential health benefits.
ICHRA Myth #4: ICHRA is only for small businesses.
Take Command Reality: Large employers are actually the fastest growing segment we’re tracking with ICHRA signups. We’ve seen a 210% increase in large employers, ranging from 50 to 1,000+ eligible employees, signing up for ICHRA.
ICHRA Myth #5: Wouldn't it be easier just to administer this ourselves?
Take Command Reality: Trust us. This is not a DIY scenario. Administering HRAs without a proper administrator is a lot of work, with various (expensive) pitfalls. Collecting medical receipts would violate privacy and more specifically, HIPAA, and the potential penalties would be large (envision if the HRA was considered invalid and all of those taxes were owed!). Those receipts also have to be securely stored for seven years.
ICHRA Myth #6: Isn’t this like other HRAs that we’ve seen in the past?
Take Command Reality: HRAs have been around a long time, but there are two new models—QSEHRA, which was introduced in 2017 for small businesses, and ICHRA, which was introduced in 2020 to companies of all sizes. Both differ from traditional HRAs in that they can’t be offered in addition to a traditional group plan and they reimburse for individual insurance premiums, not just medical expenses.
ICHRA Myth #7: Switching to ICHRA can’t be worth the pain.
Take Command Reality: Change is hard! You’re right. But with the right HRA administrator, we can help with change management, consensus building, onboarding, and continued support. With our industry-best renewal rate of 90%, our clients aren’t looking back (and our broker partners keep sending leads our way).
ICHRA Myth #8: The ideal ICHRA client has low participation, low wages, high turnover, and carve outs.
Take Command Reality: ICHRA isn't here to solve a participation problem, it's an innovative strategy and quality solution high participation groups should consider switching over to. In fact, within our mid-market and enterprise business segments, we see most participations to be above 50%. A full ICHRA replacement might be the best choice for your client. It’s not just for the few employees out of area or restaurant and hospitality groups with lots of eligible employees (but high turnover and low participation that skews affordability).
ICHRA Myth #9: ICHRA is a great solution after you've exhausted your group options
Take Command Reality: ICHRA shouldn’t be a last resort! In fact, in certain situations it’s the model of choice. Be the hero and save your client money. Most save an average of 15% right off the bat; some save millions in their first year alone.
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!