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Life Health > Health Insurance > HSAs

Some Clients Could Get ICHRA Cash for Coverage

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Some small and midsize employers who have noticed “individual coverage health reimbursement arrangements” love the ICHRA concept.

Workers can use the employer-provided cash in ICHRAs to buy their own individual health insurance.

In New Jersey, about 41% of benefits buyers surveyed said they had heard of ICHRAs. About 11% of the buyers who knew about ICHRAs said they were likely to adopt the arrangements, and 12% said they already had ICHRA-based plans in place.

Katherine Hempstead, a health policy expert who is skeptical about the future of ICHRAs, presented the survey results Tuesday in Tampa, Florida, at the National Association of Insurance Commissioners’ fall national meeting, during a Regulatory Framework Task Force session.

What It Means

Some clients may soon be able to use the employer cash in an ICHRA to buy their own individual health coverage. They may want advice about how to do that.

The Survey

The New Brunswick, New Jersey-based Rutgers Center for State Health Policy conducted the survey Hempstead cited to see how the market for ICHRAs and another relatively new cash-for-coverage arrangement, the qualified small employer health reimbursement arrangement, is performing.

The sample included benefits buyers at 184 small and midsize employers in New Jersey.

The History

Employers, regulators and health insurers have debated the merits of employer-sponsored cash-for-coverage arrangements for decades.

The administration of former President Donald Trump completed final ICHRA regulations in mid-2019.

ICHRA promoters hoped to sell a few plans in 2020, then expand in 2021. The COVID-19 pandemic showed up in January 2020 and slowed everything down. Now, companies like PeopleKeep and Take Command Health are trying to reboot ICHRA marketing efforts.

Hempstead’s Views

Hempstead, a senior health policy advisor at the Robert Wood Johnson Foundation, suggested that poorly designed ICHRA programs could lead workers to buy bad coverage, or hurt the health insurance market by pushing sicker workers toward unlucky coverage providers, according to a slidedeck included in a Regulatory Framework Task Force document packet.

Hempstead recommended that states strengthen ICHRA coverage standards and require employers with ICHRA programs to offer ICHRAs to all employees.

(Image: fizkes/Adobe Stock)


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