Your employer has announced they are switching your medical benefits from a group policy to something called ICHRA. But what exactly does that mean and how does it impact your coverage?
What is ICHRA and how does it work?
ICHRA stands for Individual Coverage Health Reimbursement Arrangement. It’s a type of health reimbursement arrangement that allows your employer to provide you a set allowance each month that you get to spend on your own individual health insurance premium. If you choose a plan that is less expensive than your employer allowance there is no additional cost to you. If you decide you want a plan that is more expensive than your employer allowance, you will be payroll deducted the difference. This allows you the freedom to choose the plan that will work best for you and your family.
Since these are individual marketplace plans, they are portable and can be continued seamlessly whether you stay with your current employer or make a change. With ICHRA, the money spent to pay for your health premium is not included as taxable income to you (these are pre-taxed dollars). Plus, with the progressive banking options at benefitbay®, you will have an individual bank account assigned to you called an ARC account. This is an account that's pre-funded by your employer to be used to pay for your individual health plan. Once autopay is set up, your plan is paid for each month and any additional amount owed will be payroll deducted from you each pay check, creating a similar experience to group coverage.
Frequently Asked Questions
1. How does ICHRA differ from traditional group health insurance?
With traditional group insurance your employer pre-picks one or two plan options for you to choose from. These plans may work for your needs but they also may not. You can't guarantee that your primary physician is in network or that your specific medication is covered. With a group plan, employees don't have control over their out of pocket cost as everyone is on the same plan. With ICHRA, you receive a fixed monthly allowance from your employer, which you can use to purchase your own individual health insurance plan. This allows you to choose any plan available in your area that best fits your needs and preferences. With this freedom of choice, you also have more control over how much you're contributing to your premium each month. With ICHRA it takes your employer out of the decision seat when it comes to your health benefits. You are empowered to use the monthly allowance to make a decision that works best for your individual needs.
2. How do I choose an individual health insurance plan?
With benefitbay® we make this process as simple and easy as possible. Once your employer adds you onto the platform, sets up an enrollment period for you, and sends you the welcome email, you can begin your shopping process. Our shopping tool allows you to easily filter based on your preferences, search for plans where your doctor is in network, and sort based on premium cost and deductibles. Once you find the plan you want, you can select that plan and submit your application which will then be enrolled by our enrollment team.
3. How does my health premium get paid?
When you sign up for an ICHRA health plan through your employer on benefitbay®, you are provided a pre-funded individual account called an ARC (Advanced Reimbursement Checking) account. This account is to pay for your health plan only, do not give out your account information to other employees in your company. Your ARC account is the one that you will use to set up auto-pay with your carrier through your member portal. When the benefitbay® enrollment team submits your application, they will use this account to pay your first months premium and attempt to set up your auto-pay. Because each carrier has different rules, yours may not allow our team to take this step on your behalf and may require your assistance in getting auto-pay set up. If you need help setting up autopay please email our team at support@benefitbay.com.
4. What if I need help with the ICHRA process?
If you need assistance with your enrollment process, have questions about how to pick a plan, or need any other help, you can email our team at support@benefitbay.com. Our team is here to help you get the most out of your employer provided benefits. We also have licensed team members who you can book an enrollment meeting with if you need assistance and advice when choosing a plan. You can schedule time with an enroller by clicking the scheduling link at the bottom of your enrollment page.
5. What should I do if I'm not happy with the plan I chose?
If you’re not satisfied with your current insurance plan, you can explore other options during the annual open enrollment period or during a special enrollment period if you experience a qualifying life event. Our resources and support team can help you evaluate other plans and make changes as needed.
6. What do I do if I have more question about ICHRA that haven't been answered in this article?
Our team is available to assist you in answering your questions so your ICHRA experience is as positive and smooth as possible. We know that changing from traditional group to ICHRA brings a lot of good but it also brings new and sometimes confusing issues. You can reach out to our team at support@benefitbay.com to get answers to your more detailed questions.