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How to Give Employees the Best Affordable Health Insurance

Finding and keeping top talent on your team has never been harder. The latest data from the Bureau of Labor Statistics show that we are 5% less than what’s needed—meaning we’re nearly 8 million workers short. Because of this shortage, staying competitive is more important now than ever. Knowing that what health insurance you’re offering is the best way to get the best people on your team!

Let me clear up a myth very quickly: more pay is not your answer to being more competitive! Hopefully, this is good news for you! We all know that you only have the money that you have. It’s hard to be able to spend any more. Because we see it all over the news of how people want to have more pay. It’s not entirely untrue. You see, it’s only partially true. It is certainly not the truest aspect of staying competitive in your hiring and retention of the best employees.

This is because 56% of employees—both current or prospective—state that health benefits are the leading factor for whether or not they stay or leave at their current job,  not pay.

Often the problem with good health benefits is the cost. Most small businesses believe that the best affordable health insurance is out of reach for their organization because of the tragic way the price of premiums has skyrocketed over the past two decades. Specifically, we have watched the cost of health benefits go up by over 368% in just 20 years. In the context of the all-in cost for an employee, the Bureau of Labor Statistics has reported for 2021 that 29.6% of total compensation is spent on benefits.

This is probably why Harvard reports that only 3.2% of small businesses believe that the top priority for competitive advantage in their staffing is health insurance premiums. Whereas 82.6% believe that the highest importance should be focused on wages. Based on the above numbers, that is precisely what we’d expect to see.

You’ve heard the old phrase: “If you keep doing what you’ve always done, you’ll keep getting the same results.”

For some reason, we seem surprised year after year of renewal increases as though the unsustainable cost increases are just okay with us. What if, however, we were willing to rethink employee health benefits and explore what’s possible? What if we have just found the secret to being the most competitive employer in your industry? Perhaps offering the best affordable health insurance is more accessible than you thought it was. 

This blog is dedicated to telling you that it actually is possible and it is happening right now.

Do you try to attract employees with a pension plan? No. Because they’re outdated. People stopped using them back in the 1980s because they were too expensive and unsustainable to manage. Sounds a little like deja vu doesn’t it? Thankfully for retirement, something called 401(k)s showed up and started letting employers contribute, but let employees have ownership of their benefit.

This is what has happened with health benefits! The “401(k) of health benefits” has been working since 2015 and has rapidly gained momentum, and the Department of Treasury has reported that up to 1 million employers are projected to join in the next 5 years. You don’t want to lose your competitive advantage!

3 steps to offering the best affordable health insurance

Thankfully, there is an easy path to unlocking what you need to compete in this labor shortage. There is an accessible way to provide employees with what they are looking for out of their total compensation. The following are the 3 steps you need to take to guarantee that you are giving employees the best affordable health insurance available in the market today.

1. Decrease what employees pay

This may seem a bit obvious—of course, employees would want to pay less. 

When we look at it from the perspective of the employee, what is the first thing they think of when it comes to their health insurance? Sure, they’ll want to see what the deductible is and if their doctors are covered. None of that matters if they can’t afford it and won’t even participate anyway! Remember what we discovered above? Employees have gotten wise to how much the medical bills are getting and they care how much of their dollars they’re going to have to spend on their healthcare.

Remember, that when you are charging your employees less for their health benefits, then you are giving them a raise anyway. This is money that can be put into their savings accounts, 401(k)s, and more! So when you do start to use step 1 be sure that you are reminding them of how much money they will net-positive in consideration to their total compensation!

The data shows us that employees pay twice as much for their health insurance as employers who use the outdated group model of health benefits. So not only are you stuck in the past, but you’re also making your employees pay for something they could get way cheaper using a better and smarter delivery model.

2. Unlock tax credit discounts

When you move into the managed individual delivery method of health benefits—the 401(k) style—there is a bonus beyond just letting your employees own their plans. This is something called the Advanced Premium Tax Credit. Before you scroll past because I said tax, let me explain the very simple basics: this is simply a discount to your insurance plan. Plain and simple.

What is the big deal about these tax credit discounts? The big deal is that they are big discounts! On average, there is a 51% discount against the total cost of the product. (Which, by the way, is already trending way cheaper than group plans!) The basic math is to take what you are paying now for group plans and cut the cost in half. That is how powerful these tax credit discounts are. (If you want more information on these, check out this blog here.)

Here is where you can start charging your employees less for their health benefits. This is the first step toward finally offering the best affordable health insurance to your employees and prospects. This is one step closer to being more competitive than ever before. It cannot stop there!

3. Increase total coverage

At the end of the day, it’s great when you can charge your employers less. If they’re not getting something better then you’re only doing half of the job. The reality is that if you simply decrease how much everyone is paying for health insurance, while you may have made it affordable, you have not made it the best. To have the best affordable health insurance we need to take some of our savings that we have gotten from moving to managed individuals and unlocking the tax credit discounts and then actually improve the coverage.

How do we do this? 

The answer is medical dollars. This can happen through HSAs (health savings account dollars) or even through HRAs (health reimbursement arrangements). The reason is that the rubber meets the road here. 2 out of every 3 personal bankruptcies in the United States are still because of medical bills. This means that it’s not just about how much they pay for their health insurance, it’s about how much they have to pay in medical bills as well. It’s also an indicator of one of the most powerful parts of building out something that is truly the best affordable health insurance for employees.

Decrease what employees pay. Unlock insurance discounts. Use savings to help with the actual medical bills. This is the winning equation that will set you apart from all of your competitors!

Stop making blind decisions… step into the future of health benefits!

A health benefits analysis is the easiest way for you to take all 3 steps mentioned here in this blog. Remodel Health has strategically designed this software and service solution to provide you with a 360-degree preview of what the “401(k) of health benefits” could look like for you to start giving your employees the best affordable health insurance. Blind decisions are bad decisions, but you don’t have to be blind anymore!

Start today and be ready to say goodbye to that constant rate of renewal increase. Take control of your team’s cost and coverage today by harnessing the power of managed individual health!

Important Notice:  Remodel Health does not intend to provide specific insurance, legal, or tax advice. Remodel Health always recommends consulting with your own professional representation to properly evaluate the information presented and its appropriate application to your particular situation.