Why ICHRA is the ideal health benefits solution for assisted living centers

In 2024, the turnover rate for certified nurse aides (CNAs) in assisted living centers was 40.28%¹. This is a costly and ongoing challenge in the senior living industry. Offering a robust health benefit is a great way to reduce turnover and improve employee satisfaction. But, limited budgets can make providing traditional group health coverage year after year challenging. Luckily, there’s another option. 

The individual coverage health reimbursement arrangement (ICHRA) is a flexible, cost-effective way to offer a personalized health benefit to CNAs, caregivers, and other support staff. When used effectively, the ICHRA can increase job satisfaction and boost retention in a tough industry. 

Let’s explore five reasons why the ICHRA is the right choice for assisted living centers.

In this blog post, you’ll learn:

• The challenges assisted living centers face when deciding to provide their staff with health benefits.
• How the ICHRA provides a flexible, cost-effective solution for daily living facilities.
• The benefits of offering an ICHRA over other health benefit options.

Check out Remodel Health’s ICHRA Report to learn more about how employers are using their benefits.

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What challenges do assisted living centers face when offering health benefits?

There are more than 32,000 assisted living care facilities in the U.S.² While many assisted living communities offer their skilled caregivers a health benefits package, some owners find it difficult to do so. While the reasons vary depending on the facility, common challenges include high benefit costs, double-digit annual insurance rate increases, few resources, and small staff sizes. 

Here are more obstacles assisted living facilities experience when considering providing health insurance:

1. They often have limited budgets. Medical care costs continue to rise annually, and many assisted living communities have tight budgets. The average annual cost to operate a senior living facility can range from $36,000 to $84,000 per resident. This can make it a struggle for business owners to carve out extra funds for medical benefits³. 
2. They have diverse workforces. These skilled nursing facilities employ a wide range of job positions, such as part-time workers and those with flexible schedules. Providing an affordable health benefit that can support the needs of all staff members can be tricky. Many fully-insured group plans don’t allow employers to add part-timers to the benefit. 
3. They’re prone to staff shortages. The senior living industry has one of the highest turnover rates. This can complicate offering certain health benefits, such as a traditional group plan, which requires you to maintain a minimum participation rate. Plus, with smaller group sizes, premiums tend to be higher.
4. They can have multiple locations in various states. If your business has several facilities operating in more than one state, you’ll have new challenges. National and state group health plans are an option, but they tend to have limited plan choices and can be time-consuming to manage. Plus, not all your employees may appreciate the coverage choices or medical services in their location.  
5. They lack benefit administration time. An assisted living center’s top priority is the care and safe environment of its residents. It also must ensure it’s complying with several federal, state, and local regulations, which can change frequently. This leaves many facilities with limited time and resources to manage a health benefit.

Offering affordable health benefits can go a long way toward making a healthcare facility an attractive place to work. But, rising healthcare costs have led employers to opt for budget-friendly personalized health benefits that can better support their team than rigid traditional group medical care plans.

Brokers working with assisted living clients often face these same obstacles. Traditional group health plans can be hard to sustain year after year. That’s why many brokers are introducing ICHRAs to clients who aren’t a good fit for group coverage.

What is the ICHRA?

An individual coverage HRA (ICHRA) is a customizable health benefit for companies of all sizes and industries. It allows employers to give employees tax-free money for their qualifying health insurance premiums.

It’s easy for employers to set up an ICHRA. First, they give employees a monthly allowance to use on individual health insurance premiums and ancillary coverage. The ICHRA has no annual contribution limits, so they can offer their staff as much money as they choose. Employers can always reevaluate and adjust their contributions when the plan year ends. 

Then, employees pick their preferred individual health plan on a public or private exchange and pay for the premiums with the tax-free allowance the employer provides. 

Below are a few key highlights of the ICHRA:

1. The ICHRA is for companies of any size. You can offer the benefit as long as you have at least one W-2 employee. 
2. HRAs can only cover W-2 employees and their qualified dependents. To participate in the ICHRA, employees must have a qualifying form of individual health coverage. 
3. ICHRA reimbursements are free of payroll taxes for employers and income-tax-free for your enrolled staff members. 
4. You can vary ICHRA allowances and eligibility requirements using employee classes. Age and family status customization is also available. This flexibility gives you more say in your benefit design according to your budget and employees’ needs. 
5. If your organization grows to the size of an applicable large employer (ALE), you can use an ICHRA to satisfy the Affordable Care Act’s (ACA) employer mandate. You can comply with the mandate if your HRA allowance is affordable. By working with Remodel Health, we’ll help ensure that you offer an allowance that satisfies the mandate.

How can the ICHRA support assisted living centers?

To help your community’s residents stay happy and healthy in their daily living, you must first support the health of your employees. In the sections below, we’ll explain why the ICHRA can help you foster a healthy workplace and improve the mental and emotional well-being of the staff at your senior health facility.

1. It’s flexible and customizable

With the ICHRA, employees can choose the health plan, providers, and medical costs that work best for them. They also have better control over how they spend their money, which can help them budget for healthcare more effectively. This flexibility can result in greater employee satisfaction, improved morale, and a healthier and financially stable workforce. 

As mentioned above, the ICHRA is customizable to meet every employer’s needs. It has no contribution limits or participation requirements, so it can support any facility’s financial situation and staff size. Plus, all your W-2 employees are eligible for the benefit—regardless of their work schedule, location, or whether they’re full- or part-time. 

You can use employee classes to narrow eligibility requirements further, such as to only full-time employees. You can even adjust allowances to attract talented job candidates. 

2. It can help you control costs

ICHRA allows assisted living centers to set defined contribution amounts for employees, avoiding the rate hikes that come with traditional plans. Once you choose the monthly amount of money you want to offer, your employees can’t exceed it. Plus, you can always increase your allowance as your business grows. 

HRAs also come with tax benefits. Allowances don’t count toward an employee’s taxable income. Your ICHRA contributions are tax-deductible and payroll-tax-free. Reimbursements are also tax-free for the employee.

For brokers, ICHRA provides a defined contribution approach that brings predictability to your clients’ budgets. Instead of navigating rate increases each renewal season, you can guide your clients toward a sustainable solution.

3. It increases recruitment and retention efforts

A flexible health benefit can incentivize skilled family caregivers and medical professionals to apply to your facility. Personalized benefits, like an ICHRA, empower job seekers and current employees to make the best healthcare decisions for themselves and their families. This level of trust can make your staff feel valued and supported, reducing turnover rates and keeping your community competitive. 

4. It can support multi-state facilities

Unlike group health coverage, the ICHRA doesn’t require your staff to be in one location. With an ICHRA, your skilled caregivers can access the insurance carriers and policy options in their area—regardless of their state. If you have multi-state workers, your employees can still use your allowance to pay for health coverage, and you won’t have to deal with any compliance issues or complex insurance regulations.

Plus, if you’re looking to recruit for your nursing home care center in other states, offering an ICHRA is an attractive benefit option that can give every employee the coverage they need, no matter where they are.

5. It’s quick and easy to administer

Managing a health benefit can be time-consuming and resource-intensive, especially for smaller assisted living centers with limited HR staff. But, the ICHRA simplifies benefits administration by eliminating the need to negotiate with insurance companies, track enrollments, or manage compliance regulations. Administration is even easier with an HRA software solution like Remodel Health’s ICHRA+®.

Our ICHRA+ platform helps you track spending, run reports, and streamline tasks so you can stay compliant while reducing the time and burden of managing your benefits. Our dashboard and support team help employees handle their individual plan selections and provide educational opportunities on their coverage options. With Remodel Health, your staff will get a health benefit they value, and you’ll have more time to focus on other operational priorities.

And when brokers partner with Remodel Health, they get more than just an administration platform and partner. Our team provides ongoing education so brokers can focus on advising their clients and growing their book of business.

Conclusion

Attracting and retaining skilled nursing care in the senior living industry can be difficult. But, you can showcase your assisted living facility as a great place to work by adopting an ICHRA. By allowing your employees to choose their health coverage, the ICHRA can help you retain a more satisfied workforce without blowing your budget.

Remodel Health’s ICHRA+® product can support every company’s size and unique needs. When you partner with us, you’ll receive high-quality benefit options and individualized support from our experienced team of professionals. No matter your specific budget or preferences, we can customize an ICHRA that’s best for you.

Contact us if you’re ready to learn more about how ICHRA+® can support your employees!

1. CNA wages, turnover decline in assisted living
2. Assisted Living Statistics 2025
3. Nine operating costs for a senior living facility

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