How Does an ICHRA Work for Large Companies


When ICHRAs became available last year as an employer-funded, tax-free health benefit, smaller companies began to say “goodbye” to traditional group plans and started to adopt this new benefit alternative instead. The benefits that an ICHRA can provide aren’t just for smaller companies. Unlike QSEHRAs, which are limited to companies no larger than 50 employees; mid-size and large companies (51+ employees) now have the option of offering ICHRAs, too. Here’s what brokers need to know about ICHRAs and large groups.

Control of rising health plan costs for large companies

As health insurance premiums continue to rise year after year, ICHRAs offer some respite. If your client is identified as having an elevated employee risk pool by their group plan provider and experienced increasing costs, an ICHRA creates an opportunity to break away by offering employees access to individual coverage. Large employers who have left their traditional group plan and adopted an ICHRA have seen large cost savings – some as high as 60%.

ICHRAs provide companies with an unprecedented level of control over their health benefit costs. For one, there’s the ability to set a budget for health benefits without being subjected to group plan’s rising costs. Additionally, the employer defined contributions can be customized to each of the 11 employee classes, better meeting the needs of everyone at the company. 

Competitive benefits packages in an ever-changing landscape

Now more than ever, employees place a lot of value in the benefits packages employers offer them. Having large companies adopt an ICHRA can elevate their package over other companies still only offering traditional group plans. In fact, according to a Willis Towers Watson survey taken in 2020, 15% of employers are planning to offer an ICHRA to some of their employees starting in 2022. The survey also showed similar interest levels across employer sizes, with 20% of larger employers planning to or considering offering an ICHRA1. The flexibility ICHRAs offer is extremely attractive: there is finally a health benefits plan that can be fully catered to employees’ needs.

Due to rising unemployment levels and furloughs during the COVID-19 pandemic, there was an intrinsic loss of health benefits for many Americans. With an ICHRA, employees have the option to take their benefits with them when, and if, they leave the company. The employer stops contributing towards the premium upon the employee’s termination and the employee takes on the responsibility of paying the full premium for their individual medical insurance. ICHRAs offer a sense of security for employees who may be concerned about an uncertain future or losing their benefits.

How does ICHRA work for large companies? Nexben makes it easy!

Large companies may want to avoid the HR headache of switching to a new benefits system. That’s where Nexben comes in. Our end-to-end solution means making the switch to an ICHRA couldn’t be easier (or more rewarding). Employees can shop for, compare and enroll in plans directly within our ICHRA marketplace and employers receive a monthly consolidated bill for all employees’ plans. Then, Nexben handles the rest, including directing premium payments to each carrier. Read more on how Nexben’s ICHRA works here