“With group health insurance, the premium spikes were really getting out of control. It was becoming impossible for our business and our employees to maintain group health coverage.”
Founded in 1965, Opportunity Development Centers, Inc. is a private, not-for-profit 501(c)(3) organization in Central and North Central Wisconsin whose mission is to empower people with disabilities to achieve their work and life goals.
ODC serves people with disabilities from early years through adulthood by providing skills training and employment services and assistance in becoming more active in their communities. Their vision is to strengthen and enrich communities through the abilities and contributions of all members.
Opportunity Development Centers offered a group health insurance plan to their employees for several years. But over the past five years, several issues were driving them to look for other options. They had a couple of employees diagnosed with serious health issues, which played a part in the organization’s expensive claims and skyrocketing premiums.
Furthermore, their organization had physical locations throughout several counties in Wisconsin, but they were limited to only two provider options where employees could seek care. These in-network locations were far from where most of their employees resided, and most employees couldn’t pay for costly out-of-pocket expenses. Group health insurance was quickly becoming too expensive—for not only the organization but also for its staff.
Opportunity Development Centers knew they had to make a change. As a non-profit with a limited budget, they wanted a more affordable health benefit that would also satisfy their ACA obligations as an ALE. They also wanted a benefit that would boost their compensation package to better attract and retain top talent.
But first and foremost, they wanted to take care of their employees’ health and wellbeing by providing them with better healthcare options.
During Opportunity Development Centers’ search to find a new health benefit solution, they looked at self-insurance and considered joining a consortium. But neither option was a good fit for their organization. Luckily, a company they work with referred them to PeopleKeep, where they learned about the possibility of offering an individual coverage HRA (ICHRA).
An ICHRA is an IRS-approved, employer-owned health benefit for employers of all sizes designed to reimburse employees, tax-free, for individual health insurance premiums and other qualified medical expenses.
As an ALE, it was important for Opportunity Development Centers to make sure they were in compliance with the ACA’s employer mandate. When speaking with a Peoplekeep benefits advisor, they found that the ICHRA complies with the mandate as long as it’s offered to 95% of their full-time employees and the benefit is considered affordable.
Opportunity Development Centers’ leadership team could determine allowance amounts based on specific employee classes based on legitimate job-based criteria as well as on employee age and family status, allowing them to “right-size” their allowances and better support their employees’ unique needs.
After talking with PeopleKeep, it was easy for Opportunity Development Centers to make a decision. Implementing an ICHRA would allow their employees to make their own healthcare decisions regarding coverage instead of being bound to a group plan that provided limited options that did not work for everyone’s individual needs. This made it easy for Opportunity Development Centers to cancel their group health insurance and switch to an ICHRA with PeopleKeep.
Opportunity Development Centers saves $100,000 per year by offering an ICHRA in place of a traditional group health insurance plan and its unpredictable premiums. The money they’ve saved will be put toward employee wages, employee retention and experience efforts, and other employee benefit options.
Opportunity Development Centers’ employees are also experiencing savings. The organization now has many employees receiving health insurance at no cost per month after their reimbursement. Leadership set allowance amounts high enough to cover most or all of their younger, single employees’ health insurance premiums. Even those on family plans get most of their premiums covered.
“We have several employees that are getting their total health insurance premium reimbursed each month. Knowing their insurance is essentially free for them is what sold us on the ICHRA.”
The ICHRA benefit has been added to Opportunity Development Centers’ job descriptions and is positioned to new hires as a health benefit that gives them more freedom to choose their health insurance and out-of-pocket costs—a benefit that helps them hire and keep good employees.
PeopleKeep’s customer success team was integral in helping Opportunity Development Centers transition from group health insurance to the ICHRA. ODC’s benefit administrator and Director of Human Resources, Samantha Stark, worked directly with her customer success manager to ensure Opportunity Development Centers’ employees understood the new benefit completely so the transition would be seamless.
Now that onboarding is complete, she’s happy they made the transition because the employees enjoy the new benefit more than their previous group health plan.
“Administering the benefit is much easier and faster than group health insurance.”
Samantha finds administrating the ICHRA very quick and easy. With group health insurance, balancing invoices and managing plan enrollment was time-consuming for Samantha. But with the ICHRA, adding and removing employees in the dashboard only takes a few minutes, and reimbursements are quickly paid out on the first payroll of the month.
Since implementing their ICHRA benefit in 2021, Opportunity Development Centers continues to have positive experiences with PeopleKeep. Employees that have used the customer service chat feature have found it easy and quick to get responses and their questions answered thoroughly. The website and dashboard are easy to navigate, and the PeopleKeep team has been attentive and helpful in handling concerns.
With the ICHRA, Opportunity Development Centers is saving a significant amount of money. But, as Samantha says, even if they only broke even by switching from group health insurance to the ICHRA, it would still be worth it to make sure their employees were being taken care of with a better health benefit.