Though employers have typically leaned towards fully-insured health plans, the adoption of self-insured plans is on the rise. Many employers are accustomed to using fully-insured plans where the employer pays a fixed premium and employees may share in that cost. A self-funded plan allows employers to pay only for the actual claims. Health reimbursement arrangements, like ICHRAs and QSEHRAs, are an alternate type of self-insured plans. Employers may be skittish of trying something new, but there are many benefits to choosing the self-insured path, and the early adopters of our ICHRA-solution, Trovia, are seeing proven benefits.
Challenge #1: Fear of changing to a self-insured plan
Opportunity: While trying something new can be intimidating, ICHRAs provide brokers a chance to bring a new and innovative health insurance benefits solution to the table. Be a trusted partner and show your clients that you’re in-tune with the best possible options on the market that may better fit their needs (and budget). In a recent ICHRA case study a broker advised, “If you don’t show your client an ICHRA solution, your competition will. It’s not that hard to open the conversation and explore what Trovia can do for your clients.”
Challenge #2: Unaware of self-insured plan alternatives and its potential cost-savings
Opportunity: Your client may be unaware that something besides a fully-insured health plan could be beneficial for them. If your client is finding themselves in a high-risk pool with their insurance provider and facing climbing premium costs, they may see a large cost-savings after adopting an ICHRA for their employees. For example, a recent case study profiles a residential property management company that left their fully-insured health plan in lieu of Trovia. After enrolling over 100 of their employees, they saw a total cost-savings of $789,894 or over 50%.
THE FINANCIAL RESULTS
Challenge #3: Worry over employee satisfaction with a self-insured plan
Opportunity: Providing a competitive benefits package is key in finding and retaining talent at a company. While employers may have the perception that their employees won’t embrace the nuances of a self-funded plan, early adopters have seen employee satisfaction (and premium savings). Let’s revisit our residential property management company case study: eight additional employees enrolled in a health insurance plan after the self-insured ICHRA option was offered. Additionally, employees saved an average of $2,307 per year because of lower premiums and an increase in health plan options. ICHRAs provide flexibility to employees that fully-insured plans simply can’t. Employees are empowered to choose the plan that fits them best and can be enrolled with a preferred provider wherever they live. The 108 employees selected 33 different benefit plans, with 7 different carriers.
Challenge #4: Adverse to changing the structure of a fully-insured plan
Opportunity: While fully-insured plans provide a structure that employers can follow easily, a self-insured option promotes flexibility around employer contributions. Brokers and clients can collaborate on the monthly contribution strategy, taking into account the 11 employee classes, age-bands, and relationships. Employees then decide what plan to select, with their portion of the monthly premium payroll deducted on a pre-tax basis.