Results show employers want to keep their health benefit simple and reimburse employees far more than the QSEHRA allows.
Salt Lake City, UT – 10/28/2020 – PeopleKeep, the first company to bring automated administration of Individual Coverage HRAs to market, has released its report, The First 9 Months of ICHRA. The report details how employers throughout the United States have used the new health benefit in the first nine months of its availability based on data analyzed from the PeopleKeep software platform.
The new HRA became available January 1, 2020 to employers of all sizes and enables employers to reimburse employees for individual health insurance premiums and out-of-pocket expenses. Unlike the Qualified Small Employer HRA, it satisfies the employer mandate and does not have allowance caps.
The report found that employers offering an ICHRA give their employees more in allowances than the QSEHRA allowance caps permit across all family statuses. The largest gap came in the Married with dependents status where ICHRA customers offer an average of 56% more than the QSEHRA allowance cap. This suggests one of the ICHRA’s main draws is that it has no allowance caps, leaving employers in control of how much money they offer their employees.
The majority of employers are also choosing to reimburse employees for both health insurance premiums and out-of-pocket expenses. Our report found that 63% of employers reimburse both expense categories, while the remaining 37% choose to only reimburse premiums.
Additional key findings from the report include:
More than 3 out of 4 employers only use one employee class.
The four most commonly used employee classes are: all employees, full-time salaried, full time, and salaried.
12% of employers use ICHRA to offer a different health benefit to out-of-state employees who cannot participate in their group health insurance plan, covering 23 states.
Larger employers offer less in allowances than smaller employers. The larger the organization, the less they offer in allowances.
The most commonly reimbursed non-premium expenses were prescription drugs, medical office visits, dental care, chiropractic care, and psychiatric therapy.