All about ICHRAs
Individual Coverage Health Reimbursement Arrangements make it easier than ever for small businesses to assist employees with the cost of health care coverage.

All about ICHRAs

“As owners of a small, family-run business, health insurance has been out of reach for us. We wish it was more affordable so we could provide it to current employees and offer it to new hires…”

Sound familiar?

Attracting qualified workers to your small business can be a challenge. Add to that, most employees want their employers to assist with health insurance costs. With traditional options prohibitively expensive for many small businesses, employers have been in a bind.

But help is on the way.

A new federally mandated program, the Individual Coverage Health Reimbursement Arrangement, or ICHRA, is making it easier than ever for small businesses of nearly any size to assist full, part-time, or seasonal employees with the cost of health care coverage.

Peak Health Alliance (partners with Southwest Health Alliance) has begun offering ICHRA (“ick-rah”) across their seven counties in Colorado just in time for hiring season when businesses are looking for a hiring advantage.

ICHRAs were designed to allow more cost control for the business, and more flexibility for the employee, who is no longer stuck with the one group plan your business offers. In addition to potentially substantial savings, an ICHRA offers substantial tax advantages, too.

Team Summit, an athletic development organization in Breckenridge, recently experienced substantial savings by switching to an ICHRA.

“Last year, through a typical small group insurance plan, we provided seven people insurance for over $44,000. This year through ICHRA we will insure 16 people for just under $30,000,” said CB Bechtel, Team Summit’s Executive Director.

BENEFITS FOR ANY TEAM

Nearly any sized business can qualify, as long as there are at least two unrelated employees. In addition to Park County joining in the 2022 plan year, Peak/Southwest is currently available to businesses in La Plata, Montezuma, Dolores, San Juan, Summit, Grand, and Lake counties.

Small businesses have often struggled to fit one plan to the many needs of their staff. Sorting through complex health insurance options while balancing a team’s needs and a business budget makes small group insurance not only expensive, but daunting.

“We’ve had so many small businesses with group plans jump over to ICHRA for the sake of simplicity,” said Elise Neyerlin, Director of Outreach for Peak Health. “The sheer amount of decisions an owner or benefits manager has to sort through is a huge hurdle, compared to simply setting up a set reimbursement amount for staff based on what’s reasonable for their budget,” she continued.

Employers can set up different classes of employees, making it easy to set different reimbursement amounts for each type of employee. Once the plan is set up, the employee has a 60-day window to shop for an ACA-qualified plan that fits their own needs and budget.

Small business owners or their benefit managers can learn more about the process through their broker, or get a preliminary quote from Peak’s team.

“A GAME CHANGER”

For Team Summit’s Bechtel, the switch has had benefits beyond savings. “Through ICHRA our organization provides each employee a monthly reimbursement, (and) we use a third-party platform to manage compliance. So far ICHRA has been much easier to manage than our small group plan (and) for seasonal employees ICHRA has been a game changer,” he said.

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