Union Orthotics and Prosthetics was facing a 40% renewal and frustrated employees wanting more choices for health insurance. That's when their broker Doug Moore pitched the idea of ICHRA to their leadership. Since then, the company has flattened their benefits spend, promoted choice for employees, and minimized required payroll contributions for their team.
Sticker Shock Spurs a Switch
Union Orthotics and Prosthetics focuses on solving problems and finding customer-first solutions. So, when the company faced a hefty premium hike, they knew they had to find another solution. The cost to renew their group High Deductible Health Plan (HDHP) had risen 40% compared to the previous year.
Union’s insurance broker, Doug Moore of Seubert & Associates in Pittsburgh, PA, is familiar with this type of scenario. He says the challenge of the group health insurance market is when an organization faces a large renewal cost, it is often based on changes in health status claims within the population and leaves the company with few options. After reviewing the rates of other carriers in the group market, Moore couldn't find another plan that would fit Union's budget. That’s when he introduced them to an alternative health plan model called ICHRA, Individual Coverage Health Reimbursement Arrangement.
ICHRAs are a game changer for employee-sponsored health care plans. They allow the employee to purchase an individual insurance plan and be reimbursed for the premium costs by their employer. In Moore’s experience, ICHRAs have been a cost-saving solution that allows employers to continue to offer quality health benefits to their employees. He presented the idea to Union’s Human Resource Manager, Todd Manley.
Of course, the first response is, what the heck is an ICHRA? So, he (Moore) went into detail about the specifics of such and we said, let's dig into it a little bit deeper and see what it's all about. If it's something that fits our company and the employees at our company, then...let's look at it.
Moore and Manley worked together to design the terms of the ICHRA to fit Union’s employees' needs. Based on Union's employee pool, Moore knew that the ICHRA would alleviate high premium costs and be a more affordable alternative.
I knew that the individual market, where there's no such thing as medical underwriting, would be a more favorable place for the company to obtain coverage. It was just a matter of understanding how to facilitate that for them.
Here's a fun picture from the HRE Leadership Conference in Vegas with Take Command's Regan Olson and Amy Skinner, Doug Moore from Seubert & Associates, Jack Hooper from Take Command, and Todd Manley from Union Orthotics and Prosthetics.
Scalability for Growing Company in New Regions
The one-size-fits-all solution of a group plan no longer served all their employees needs. This solution allowed them to rightsize their coverage. Manley says that the ICHRA offered choice to the employees when they previously had an Aetna High Deductible Health Plan as their only choice.
Employees can now select individual healthcare plans that fit their specific needs and let them see their preferred providers.
When Union switched to the ICHRA model, employees had multiple different plans to choose from. In Allegheny County, PA alone, there are two different carriers offering six different networks and 11 different plans.
“The options the ICHRA provided, there was plentiful options for everybody that they choose from, which made it beneficial for everybody, really. So from that standpoint, we thought it was just a good fit for our company,” said Manley.
Employees Win and Save with ICHRA
By switching to ICHRA, Union not only dodged a 40% premium hike - many employees had the total cost of their premiums covered. While 60% of employees chose a Gold plan, 40% chose a Silver plan. The monthly reimbursement amount from Union covers the total premium costs of most Silver plans - eliminating the employee premium contribution altogether.
The ICHRA gives the power back to employees by allowing them to shop for the coverage that fits them and gives them the power to use their dollars wisely.
The employees enjoy having options to their plans, especially a lot of our younger aged individuals that don't have to pay that higher rate for a group plan. So it's definitely beneficial to them and even for our Medicare eligible beneficiaries that we have that works out best for them as well. It's something that we really like.
Tech-Based Solutions with People First Empowerment
With a traditional group model, employees generally only have one plan to choose from. With an ICHRA, it’s up to the employee to purchase their plan on the individual marketplace. A change in healthcare plans can cause some anxiety for employers and employees alike. However, with the Take Command platform and customer service, Union’s employees were able to enroll to their insurance coverage of choice with ease.
Your model obviously is very tech driven and that's great. And for many employers, that online experience is so important. And I love the way you guys complement that with your enrollment support and some of the other features that you offer.
Manley says the first year of ICHRA was the most challenging given the change. Since employees are able to choose their own health insurance plan, it required a bit more time on the employees' part to look at plan summaries to find the right fit. But he admits it didn’t take long before everyone understood the new process. Manley credits Take Command to help them facilitate a smooth transition.
I think everybody is well in tune with what they need to do. It's much more seamless now. Take Command provides the tools there for everybody to enroll in very easy formats on the platform.
About Union Orthotics and Prosthetics Co.
Union Orthotics and Prosthetics has served Western Pennsylvania for more than 100 years. The family-owned and operated business has 20 locations and is dedicated to providing quality patient care and service. Union specializes in: Prosthetics, Orthotics, Pediatrics, Cranial Remolding, and Wound Care. Each service area focuses on the patient experience through innovative solutions, custom fabrications, and no-hassle customer service.
To learn more, visit https://unionoandp.com/
Union’s employees are benefiting from some of the best aspects of ICHRA. They can select a personalized plan that fits their needs while avoiding unexpected premium hikes. For Union, making the switch to ICHRA was the right choice.
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!